PACOIMA, Calif.-Despite sometimes feeling pressured by regulators and a difficult economy, Pacoima Development FCU continues its slow but steady growth.
The tiny credit union was featured in Credit Union Journal earlier this year for its determination to help other small credit unions offer Small Business Administration loans to their members through the establishment of a CUSO ["
Antonio Pizano, manager of Pacoima DFCU, proudly reported the 850-member credit union now has $4 million in assets.
"We recently revised our business plan to show not only our expected growth but the mitigating factors we are facing," he said. "We are instituting a member business lending CUSO, which has taken a long time to get going. It has not moved as quickly as we thought it would, so we recently changed our strategy from working with individual credit unions to partnering with large organizations such as the California Credit Union League."
Pacoima DFCU is sponsored by and works with a nonprofit known as the Valley Economic Development Center. Pizano said given the state of credit unions in general and the state of the economy, he would say the credit union is doing well. He added he would have liked to have experienced more growth by now, but for different reasons it has been unable to do so.
"The credit union is 6 years old, and we would have liked to be up to $5 million or $6 million."
Examiners & Compliance
One issue that dogs many small CUs is compliance, and Pizano said he sometimes is frustrated by the attitude displayed by examiners.
"Compliance is a major challenge for smaller credit unions like ourselves. We often don't have the expertise in house, meaning we have to outsource. On top of that, most small credit unions are in a continual growth stage," he said.
"Examiners are asking for a higher level of due diligence. At our credit union we are always right around the 7% capital threshold the NCUA wants, so I have to keep a close eye on it," he said. "They seem to get more nervous about small credit unions failing, which gives the impression the regulator would rather see us merged."
According to Pizano, Pacoima DFCU is "doing well" with compliance and has a CAMEL rating of 3, which he said "is acceptable."
"It is a challenge for us to keep up to date with regulatory issues. We have an advisory committee that is very active and we have worked with a consultant for three years. It helps that we keep things pretty simple."
Believing in CUs
Pizano wants other CUs of all sizes to believe in what they are doing. He said it would be "highly irresponsible" for credit unions to turn their backs on the entrepreneurial spirit on which they were founded.
"We need to help small businesses in the community not just survive but thrive, and that is something we want to continue to build on in the coming years."
