California Credit Union has had a busy year.

The non-profit financial institution, which serves workers in the field of education, moved a branch from Cahuenga to North Hollywood and opened a branch in Woodland Hills.

Next year promises to be even busier, with branches expected to open in Covina, Carson and Santa Clarita.

Think the explosion of branches is just a commercial bank phenomenon? Think again

The Glendale-based credut union recently decided upon a growth strategy that heavily relies upon building two to three branches per year and it's not unique.

"We have been trying to add convenience with new locations, the improvement of electronic delivery service and competitive rates," said Ron McDaniel, chief executive of California Credit Union. "Those key factors are driving growth."

Even as competitive pressures and changes in government regulations are driving consolidation among credit unions, the number of branches is growing.

Three years ago there were 1,462 credit union branches in California. This September that number reached 1,809, a nearly 24 percent jump. That growth mirrors increases in assets, deposits and membership by credit unions serving Southern California.

Historically, credit unions have had restricted membership, available only to those people closely tied together, whether it be workplace or house of worship. But in the past two decades, membership restrictions have been loosened, and credit unions have been taking advantage of the opportunity to open more branches and offer a wider variety of services.

In 1982, credit unions were allowed to start serving workers with a common bond instead of just a specific company. Thus, a credit union affiliated with one defense contractor could serve employees of others. Then in 1998, a federal law allowed credit unions to serve people in geographic areas. Membership also was opened to families of credit union members.

Suddenly, that meant opening branches suddenly became a logical way to expand.

"What used to be local and community specific has dramatically increased. The potential customer base for credit unions is approaching that of banks," said Raphael Bostic, a professor of real estate and banking finance at the USC Lusk Center for Real Estate Development.

Unfair advantage

Consider California Credit Union with its 78,000 members. In the past year alone, it has seen growth in deposits of 14.7 percent and in assets of nearly 14 percent. McDaniel said his organization already had broad membership criteria, but some competitors with more restricted memberships have taken even greater advantage of the changes.


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