Nearly 50 California credit unions have created a business development network to swap ideas on how to attract more customers.

Sponsored by the California Credit Union League, the statewide network held its first meeting last week in Long Beach to share ideas for increasing business now that credit unions are allowed to serve more than one field of membership, or even entire communities. The group plans to meet quarterly.

Many participants were credit unions that had recently switched from federal to state charters. Since 1996, 34 federally chartered credit unions in California have switched to state charters because California regulators have been quicker than their federal counterparts to approve applications to expand credit union membership, officials said.

The new network should help the nonprofits overcome some of the obstacles to finding new members, according to Chris Lamb, executive vice president of $310 million-asset Energy First Credit Union in the Los Angeles suburb of Monterey Park.

"The biggest challenge has been finding businesses that fit into our existing field of membership that aren't already being served by other credit unions," Ms. Lamb said. "Another challenge is getting more employees of the companies we serve to join."

She said "personal touch" is proving the most effective way to attract customers.

Energy First is willing to visit member companies and talk with employees, "educating them about the differences between a credit union and a bank," Ms. Lamb said. "We tell them that we try to keep the cost of loans as low as possible and we try to pay back to customers as much as we can in our savings products."

For credit unions that have switched to community charters, the network is offering help to change their marketing focus from particular industries to a region's entire population.

"There's also the question of whether or not to build more branch offices or service new customers electronically with the Internet or a telephone call center," Ms. Lamb said.

The stepped-up marketing efforts of the state's credit unions could spell more competition for California's community banks - causing some bankers to squirm.

"There's a crisis in small banks - funding sources in the form of deposits are drying up," said Stephen Andrews, president and chief executive officer of the $100 million-asset Bank of Alameda near San Francisco. "But small banks are the engine that keeps a lot of America running because we support small businesses - something credit unions can't do much of because they are restricted. So the expansion of credit unions takes away more of our funding sources and impacts our ability to lend to small businesses."

However, Ms. Lamb contended that there is enough room in the state for both types of institutions.

"I do understand the bankers' point of view, but we're finding people who haven't been approached by community banks and who are not being helped at all," Ms. Lamb said. "For example, there is a huge Hispanic market in the state that is underserved, so credit unions are offering checking accounts to them to keep them from using expensive check-cashing places. I think there are plenty of people out there for all of us."

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