Ventura County CU's Exclusive Role Is Called Into Question
VENTURA, Calif.-A Ventura County supervisor here is questioning why Ventura County Credit Union doesn't have more competition when it comes to serving county employees.
Supervisor John Zaragoza last week introduced a motion that the $1-billion Western FCU be given the same favored treatment as VCCU-being allowed to present at new employee orientation and to be designated as a second option for direct deposit of paychecks. No supervisor seconded the motion, and after discussion the matter was tabled for six months pending further review of options-including the possibility of still other CUs being allowed to present at orientation. Joe Schroeder, president and CEO of $509-million Ventura County CU, told Credit Union Journal the episode left him wondering, "What is the problem?"
"We have been in business for 61 years since 10 people from the county started the credit union," he said. "We are literally across the street from the county building. I have an incredible amount of respect for all the supervisors, but I don't understand this."
According to Schroeder, there are 19 financial institutions within a mile and a half of the Ventura County government center, and 14 within 500 yards. "It is easier to open a checking account than it is to get a hamburger here," he quipped. "There are six to eight credit unions that anyone in Ventura can join, possibly more, so there is tremendous competition. I don't have a problem with competing, that is just the landscape today. What I have a problem with is Supervisor Zaragoza wanting to endorse another financial institution without doing due diligence."
Zaragoza, who oversees the county's 5th District, told Credit Union Journal the goal he has for his constituents and for Ventura County employees is, "to provide the best financial services options."
"I also want to provide some competition, because I have run my own business for many years and understand the value of competition," he said. "Western is a big credit union and one thing Western provides is bridge loans to small businesses, rather than having to go through the Small Business Administration. Eighty percent of jobs in the U.S. are created by small businesses, and I keep hearing small businesses are not getting enough capital."
Zaragoza said his motion was intended "just to augment Ventura County Credit Union, which is providing a good service to the community. I just want to add additional options for our employees. There are quite a number of employees that have small businesses. Any other credit union that can meet thresholds by providing jobs and loans, let's get them in there."
Zaragoza said he has belonged to CUs-including VCCU-for years. "I don't want to destroy Ventura County Credit Union, I just want to have other options presented at orientation. Ventura County Credit Union converted to a community charter in 2000, which allowed it to compete with other banks and credit unions in Ventura and Santa Barbara counties, so this is part of that competition."
VCCU CEO Is Not Convinced
Schroeder was not convinced, stating, "Obviously, Supervisor Zaragoza has a relationship with Western Federal Credit Union." Told Zaragoza said he had no vested interest in Western FCU's status with the county Schroeder replied, "That's what he says."
What really irks him, Schroeder continued, is there have been no complaints that suggest county employees are or have been dissatisfied with VCCU's service. "Here is our special status: we get three or four minutes at orientation. There is not much preferential treatment. I absolutely appreciate being mentioned at orientation, and we are allowed to give a presentation, but we can't even open an account at orientation. If people want to open an account they have to walk across the street to our branch."
In its December 2010 Call Report Western FCU had net income of $1.7 million excluding NCUA assessments of more than $3.3 million. Including assessments it lost $1.6 million for the year. Western is a multi-state, multi-sponsor CU headquartered in Manhattan Beach, Calif., about an hour away from Ventura. Ventura County CU posted 2010 net income of $6.3 million before assessments of $1.1 million. Its net income was $5.2 million.