NEW ORLEANS -
"We've pledged to pay operational and loan loss expenses until such time as CLFCU can operate on its own," said Gianfranco Piccollo, a technical assistant in OCTFCU's division of organizational planning and development, to a "Power of Two" workshop audience at the National Federation of Community Development Credit Unions here. The goal in providing such support is to relieve CLFCU of some of its operational financial burdens, allowing the credit union to better serve its members, he said.
Chartered in 1934, $7.1-billion OCTFCU is based in Santa Ana and serves educators, administrators and their families in 10 Southern California counties. Since the credit union's founding, Santa Ana's population demographics have significantly changed, causing credit union officials to consider a different approach in serving consumers in its headquarters community.
"The city of Santa Ana is 75% Hispanic, with the majority of households having Spanish spoken as their primary language," said fellow presenter Luis Valerio, chief executive officer of $1.3-million CLFCU. "Products, services and marketing are tailored to primarily reach this group."
Prior to opening its doors in November, CLFCU officials surveyed the community to find out its needs, Valerio said. Since that time, personal and auto loans for small amounts to help members denied credit elsewhere have become the credit union's staple products. Through its community status, the credit union is able to serve anyone who lives, works or worships in the city of Santa Ana.
Credit unions nationwide have helped support the credit union's loan fund by making interest-free deposits in CLFCU, Valerio said. OCTFCU also provides financial support for operations to allow CLFCU to build capital. CLFCU is responsible for its own loans, loan losses and member dividends.
"The goal is that over time, CLFCU will slowly take on operational expenses and eventually become self-sufficient," Valerio said. "This may take several years."
To date, support from the credit union movement has been positive, enabling the small credit union to gain traction in building its service profile. The community's reaction also has been largely positive, with 200 new members enrolling and more than $300,000 loans granted since the institution opened its doors last fall. The credit union also has issued 20 individual taxpayer identification numbers (ITINs) to members.
"Our biggest challenge lies in creating awareness and educating the community on what we have to offer," Valerio said. "There are misconceptions in what a credit union is and what we do. The CLFCU board of directors has been instrumental in lending credibility and support to the credit union as prominent members of the community."
Such support, both from the community and OCTFCU, will enable the credit union to succeed in serving its members, he added.
