Bankers have been complaining for years about the ease with which
Three credit unions in the Golden State have unveiled major expansion plans this year, with two of those announced in the last few weeks.
California Credit Union in Glendale, for example, recently received regulatory approval to expand its service area into two new Southern California counties. The $4.5 billion credit union will now serve San Bernardino and Ventura counties, and it also converted to a community-based charter in its home of Los Angeles County.
With the expansion, the credit union has extended its field of membership to all communities in six counties across Southern California.
The American Bankers Association said Congress needs to remember that it gave credit unions a tax exemption to help meet the needs of underserved communities tied together by a strong common bond.
"Expansion efforts like these [in California] illustrate how far some credit unions have drifted from their mission by targeting affluent areas for growth," said Robert Flock, vice president in the office of strategic engagement for the ABA. "We continue to call on Congress to reexamine whether special treatment for credit unions is still warranted."
But California Credit Union said that with a number of existing members already living in the new counties, the expansion is a logical extension of its existing service areas.
The credit union, which has more than 170,000 members, is "conservatively" projecting that the expansion will result in a roughly 3% increase in its membership in the next two years, said California Credit Union President and CEO Steve O'Connell in an interview.
And there may be further expansion on the horizon for the company.
"As a state-chartered credit union, we're always open to exploring additional markets in California where it makes sense," O'Connell said.
He called the current expansion plans a "significant strategic step to future expansion and member acquisition," with the goal of having a cohesive network across all of Southern California.
And California Credit Union is not alone in its strategy. Earlier this year, Yolo Federal Credit Union in Woodland, California, said it received regulatory
The $414 million-asset credit union has been serving roughly 22,000 members in Yolo County, which has a population of 221,000, since 1954.
More recently, the $607 million-asset PremierOne Credit Union in San Jose said it has received approval from its federal and state regulators to expand its field of membership to eight new counties: Santa Cruz, Monterey, San Benito, Alameda, San Mateo, Merced, San Joaquin and Stanislaus.
PremierOne Credit Union has been serving Santa Clara County for more than 80 years and now has nearly 26,000 members.
The credit union has increased its technological capacity and will be able to expand its financial education programs and continue to build strong partnerships with the community in the new markets, according to PremierOne President and CEO Andrea Brewer.
The credit union remains focused on sharing the benefits its current members enjoy across a much larger region "so adjacent communities can flourish financially," she said.
PremierOne Credit Union has yet to announce branching plans in the new markets and will serve members in these regions through its online and mobile channels for now.
California Credit Union says it's too early to disclose any plans for new branches. The credit union is conducting market research and looking at membership trends to determine branch locations that best serve members, according to O'Connell.
"While these plans are in development, we're well prepared to immediately begin serving our new communities through our virtual branch, online banking and our mobile app," he said.
Consumer lending — specifically auto loans and credit cards — will be a key target area in California Credit Union's new markets. The company is already seeing a lot of interest in its mortgage loan products in those areas, too, O'Connell said.
"Also, we see a great opportunity for business loans, particularly in situations where owners feel they have been abandoned by their community business lenders," he said.
