This article has been revised and corrected from the original version.
Glendale-based California Credit Union will expand to Ventura and San Bernadino counties following regulatory approval from the California Department of Financial Protection and Innovation.
Historically an occupation-based credit union serving educators in Los Angeles, the organization also announced it would convert to a community-based charter for its entire Southern California presence.
“There are many transplants into Los Angeles,” said Steve O’Connell, president and chief executive officer of California Credit Union. “Prospective members that are interested or have been interested in our products and services haven’t been able to use our products and services because they didn’t qualify.”
Anyone who lives, works, attends school or has a business in Los Angeles, Orange, Riverside, San Diego, and now Ventura and San Bernardino, counties is eligible to join the credit union.
The California Credit Union already has members who live in Ventura and San Bernardino, but the regulatory approval, announced earlier this month, now allows it to build a retail presence in the areas.
San Bernardino is the largest county by land mass in both California and the United States. While the county is largely rural, nearly 2 million residents live in the San Bernardino Valley alone. The credit union is studying this new vast market to understand where a retail branch can best reach customers.
“San Bernardino is a greatly underserved market when it comes to financial services,” O’Connell said. “Some of the area could be considered an urban banking desert because there’s so few banks and credit unions in that space.”
According to O’Connell, many members indicate a need for a physical presence to feel confident in the bank’s services. The credit union has 13 branches in Los Angeles and three in the San Fernando Valley, and plans to market its digital products in the new markets while it scouts retail locations.
Founded in 1933 by a Los Angeles school teacher, the California Credit Union was launched to serve L.A. Unified School District Employees. As it expanded, its classification from an occupation-based institution changed to common-bond, including all educators and their relatives.
Acquiring San Diego-based North Island Credit Union in 2017, the California Credit Union moved into a community-charter role. Now, the credit union oversees more than $4.5 billion in assets and serves more than 170,000 members.
O’Connell identified the credit union’s target customer base as middle-income earners and underbanked populations who may lack traditional banking experience. According to a 2021 survey by the Federal Deposit Insurance Corporation, nearly 19% of California households are categorized as underbanked or unbanked entirely.
In May, the California Credit Union received the Bank On National Account Standards certification from the Cities for Financial Empowerment Fund for its checking account product, as the credit union does not have overdraft charges or fees.
As the credit union expands, particularly into San Bernardino County, where the rate of family poverty is higher than both the state and national averages, O’Connell says this risk is purposeful.
“Banks would say that there’s no profit to be made in that market, that demographic, so that’s why they’re not there. That’s the honest truth,” O’Connell said. “It’s a business decision they’re making. Well, we’re taking a different business position.”
