California's 800 credit unions are among the few industries unscathed by the state's sluggish economy this year.

"We all know California is going through a slow recovery, but the impact on credit unions has been negligible," said Daniel Murphy, director of the National Credit Union Administration's West Coast region. "We've had no significant problems with delinquencies."

Ed Callahan, president of San Francisco-based Patelco Credit Union, seconded Mr. Murphy's sunny outlook.

"Things are upbeat out here," he said.

As the California Credit Union League begins its annual convention this week in San Francisco, life is looking pretty good for the state's member-owned cooperatives.

Assets of the Golden State's credit unions stood at $42.2 billion in June, up 7% from a year-earlier, according to Veribanc Inc., a rating service in Wakefield, Mass. That compares with 6.3% growth nationwide in the same period.

But loan growth and return on assets were slowed somewhat by the economy. Loan portfolios grew 8% to $23.6 billion, compared with 11.6% growth nationwide. California credit unions' return on assets does lag behind the national average, Mr. Murphy said, holding at about 1% compared with 1.2% nationwide.

Meanwhile, the number of nearly insolvent or insolvent credit unions fell to five from nine in the 12-month period, and problem loans fell 4% to $188 million.

Credit unions were able to dodge the meltdown suffered by some community banks, their chief competitors, by sticking to consumer. loans, said David Chatfield, president of the California league. "Credit unions were more conservative in conducting financial affairs," he said. "They were not involved in commercial and speculative real estate."

Credit unions and the regulators also benefited from the misfortunes of credit unions in other states, notably those in the Northeast and Alaska.

"Alaska taught us how to deal with a situation where you had a lot of OREOs [repossessed properties], in that you sell them and not warehouse them," Mr. Murphy said. "We knew how to deal with a recession before it happened here."

"Most Californians were reluctant to see the rosy ongoing California economy come to a halt, and some people pretended it didn't happen," Mr. Chatfield said. But credit unions "began planning how to deal with a recession" in 1989.

He cautioned that although the economy appears to be recovering, some shakeout will continue. "There are still some hits to be taken."

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