Wescom Mentoring Group Aiming To Launch CU
Government officials here, with the assistance of Pasadena, Calif.-based Wescom CU, are working to gain approval from NCUA to open a community credit union in this working-class suburb of Los Angeles.
Joe Schaeffer, Wescom's senior VP-planning and development, said Wescom is serving as a mentor to the Valley Economic Development Center, which is spearheading the drive to open a CU. He said the VEDC has done business loans for years, but is looking to extend its mission. The proposed CU would write small business loans in an effort to create jobs.
"Roberto Barragan, the director of the Valley Economic Development Center, is trying to establish a credit union to help develop the area's economy," said Schaeffer. "Wescom is working with the lead people at the VEDC. We identified a technology consultant to help them choose a system. Wescom also helped with the business plan for the credit union. We reviewed the ratios and made some constructive comments."
In an effort to help the VEDC understand the CU movement, Wescom referred officials to small credit unions in nearby communities to discuss operational issues they will face.
"We are not doing the work, but we are offering our expertise," explained Schaeffer. "We point them in the right direction."
Awaiting NCUA Decision
Wescom's involvement in the effort to establish a credit union here began in spring 2003, but planning began months earlier. After Wescom reviewed the business plan, it was submitted to NCUA last summer. Schaeffer said his sense is NCUA was impressed by the business plan, but wants to ensure the CU will be profitable down the road.
"They are examining ratios and growth projections. One problem is the credit union needs a deposit base, which can be an issue with low-income groups," he said.
The proposed credit union, which will receive initial funding from Los Angeles County economic development sources, probably is about three months from opening its doors, he estimated. It has a location, and NCUA has completed the on-site inspection.
According to Schaeffer, the impressive thing about the VEDC is the volunteers who serve on the board and on committees. "We want to give them the opportunity to use our expertise, meet with our operations people quarterly-or more often if they wish. We can continue in a support role indefinitely."
Wescom has offered to deposit $100,000 interest-free for three years. Schaeffer said Wells Fargo has committed to making a similar deposit to help the CU get off the ground.