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Community is the bottom line for local credit unions

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‘We put members in the right product at the right time – and we’re doing well as a result,’ says Teresa Halleck, San Diego County Credit Union president and CEO.

By Janine Rojas

Carlos Rodriguez is only 14, but he already understands the principles of sound money management, thanks to some tips he learned from a San Diego-based credit union. Save your money safely and wisely. And don’t take on loans you can’t afford.
If only the nation’s mega banks would have touted such advice to its homebuyers — as credit unions did, while adhering to careful lending practices that protect the assets of their members.
“Credit unions are not immune to the effects of a lingering recession, but our high standards as conservative lenders have served consumers well through these difficult economic times. Credit unions overall remain well capitalized and ready to lend,” said Diana Dykstra, president of the California Credit Union League.
There are more than 450 credit unions in California, and approximately 25 credit unions headquartered in the San Diego area. Others are based elsewhere but have local branches.
The largest local credit union exclusively based in San Diego is Mission Federal  Credit Union (MFCU).
“Just like every credit union out there, Mission Federal’s mortgage loans are very well underwritten. We leave the subprime and exotic loans to the big banks, which they are more than happy to provide for a fee,” contends MFCU chief financial officer Ron Araujo. This approach has contributed to MFCU’s success in maintaining profitability, increased services and expanded branch locations, he said.
Credit unions did not make the ill-advised loans provided by other financial institutions that helped contribute to a lingering recession. Instead, they have focused on serving the needs of its members and the community at large, according Dykstra. She says this philosophy is helping the credit union industry in San Diego and throughout the state to grow strong while helping its members prosper.
“We didn’t make this mess, but we were certainly hit by the shrapnel of it, because it impacted our members. We didn’t make the bad loans, but we’re there to provide help,” said Dykstra.
San Diego industry experts agree.
“While touting the American dream, banks were in reality setting up people to fail. In contrast, we never put people in the position of having payments for a home they could not afford. We put members in the right product at the right time – and we’re doing well as a result,” said San Diego County Credit Union (SDCCU) president and CEO Teresa Halleck.
SDCCU is a full-service financial institution serving San Diego, Riverside and Orange counties. SDCCU has consistently applied prudent underwriting standards which benefit the consumers and credit union industry as a whole, noted Halleck. She added that investing in the community is another core value, citing SDCCU’s far-reaching charitable efforts include the upcoming National Multiple Sclerosis Society auction fundraiser, the annual Chargers Blood Drive and financial workshops for youth.
It was at a similar workshop — one hosted by California Coast Credit Union (CCCU) – that teenager Carlos learned about smart banking. He did so well, his photo was featured in the SAY San Diego/United Way of San Diego County “Kids & Money” exhibit last month. The event was in keeping with CCCU’s ongoing practice of helping individuals and groups achieve their financial goals, said Rene McKee, vice president of marketing and community relations for CCCU.
Reaching out to the community is a running theme at other area credit unions as well. Some gear their efforts to the specific interests of their core memberships. For example, Mission Federal Credit Union (MCFU) – which got its start nearly 50 years ago as a public schools credit union — provides financial support to learning institutions its Mission4RSchools program and other efforts. Although MCFU has since modified its charter to make everyone eligible to join, the organization maintains its focus on education.
San Diego Metropolitan Credit Union  (SDMCU) interim president and CEO Stan Abrams says that he is always looking for ways to assist SDMCU members, many of whom were hit by municipal salary reductions. Others are challenged by unaffordable loans in second place behind SDMCU mortgages.
“For members in that position, having problems with payments, we provide counseling and try to restructure or modify loans when it is prudent to do so and in compliance with regulations,” said Abrams.
In addition to serving the San Diego public at large, SDMCU is the official credit union for the city of San Diego, and for law-enforcement agencies. Several products are especially for member sectors — such as the 1010 line of credit to finance police equipment needs. In other cases, SDMCU provides special loans and services to members impacted by natural disasters, such as wildfires or earthquakes.
In another example of tailored programs, Cabrillo Credit Union (CCU) helps meet the financial needs of persons working for Border Patrol agents.
“Our members benefit because we focus on them, understand their nuances and have their best interests at heart. They own us, and we tell them we work for them. They are our bosses,” said Robin Lentz, CCU’s chief executive officer.
Lentz characterizes CCU as a mid-sized institution focusing on federal employees, although it converted its community charter a few years ago to include all residents who live or work in San Diego. She contrasts CCU’s merger to that of San Diego’s USA Federal Credit Union, which was absorbed by Navy Federal Credit Union due financial hardships. CCU fared better than it might have during the economic downturn due in part to mergers with Sharp Federal Credit Union (2003) and Carlsbad City Employees Federal Credit Union (2004). The combined resources enabled CCU to provide a higher level of banking and bolster capital. In addition, having a more diverse client base reduces financial risks, Lentz said.
Lentz and other local credit union leaders agree the fall-out from the rocky times has made credit union membership more attractive.
“Capital is at an incredibly high ratio, which points to the safety and soundness of the industry,” said MFCU’s Araujo.
As a nonprofit organization, credit unions typically offer higher savings rates and charge less for loans — along with appeal include the ease and efficiency of local control.
Abrams of SDMC says another factor is the absence of a profit-absorbing middleman layer. “Credit unions are different (from for-profit institutions) because we don’t report to stockholders. Instead, we ask ourselves, how can we better serve and return value to our members?”
Araujo puts it another way: “Awareness is helping grow the industry,” as people turn away from banks. “Credit unions are kind of a phoenix- rising-from-the-ashes thing.”

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