LONG BEACH — Pacific County residents have another choice for banking on the Washington side of the Columbia River. Wauna Federal Credit Union (WFCU) can now legally accept Washington residents of Pacific County as credit union members.

Wauna CEO and President Robert Blumberg says, “What we found was that people were coming over the bridge from Washington and seeking out membership in WFCU, so we have developed a local business there rather organically. We identified the southern end of the Peninsula and Pacific County as underserved, especially focused on the lending side.”

“Most folks want to be close to their deposits but don’t necessarily need to be close to their loans,” he said.

WFCU, with 15,500 members, has total assets of $143 million and seven branches in Astoria, the Astoria Safeway, Clatskanie, St. Helens, Scappoose, Vernonia and Warrenton. The credit union was founded in 1967 and currently employs about 70 staff.

Expanding into Washington

Blumberg, born and raised in Johannesburg, South Africa, spent 16 years in California before moving to Oregon 16 years ago with his wife and four children. Blumberg and marketing director Mike Chapman see the credit union’s expansion into Pacific County as a business opportunity.

Blumberg said, “Up until recently, Washington residents were not eligible for membership in our credit union. In the past our membership came from two counties in Oregon. Clatsop and Columbia, but we applied to the NCUA [the National Credit Union Administration] to change our charter and we can now accept Washington members.”

“We already have approximately $700,000 of commercial loans in Pacific County,” he said.

Chapman explained, “We feel there is a need in Pacific County. Before, Washington residents could still qualify for membership if they worked in Clatsop County. But as of March 26, we can accept any Pacific County resident as a full credit union member.”

No branch but full services

“We do not have any plans to open a branch on the Peninsula,” said Blumberg, “however, we do offer a suite of business products — mortgages, commercial and car loans — and we have quite a robust suite of online services: text banking and mobile apps. And we are going to continue expanding our technology.”

“Text banking” is the term for banking services and information gathering that can happen from a smart phone over the Internet. WFCU has made it easier to access account information and to get transactional data.

“If you’re at the super market, for instance, and you’re wondering what the balance is in your account, you can send a text from your phone and get the account balance immediately. Or if you want to see the last four transactions in your account — the system is designed for quick inquiries,” said Blumberg.

Chapman added, “A couple of our online electronic text banking services are really convenient from a cell phone. In addition, as Robert was mentioning, for a majority of consumers maybe they’ll come across the bridge one time, open an account and meet with our friendly staff, but from then on, there are so many services that they can access without coming to the branch — payroll checks can be deposited directly to their accounts, they can make withdrawals from their accounts — all by going through the website.”

Weathering the storm

The housing bust left many banks in poor financial shape. The banks “too big to fail” were given an emergency injection of funds from the Troubled Asset Relief Fund (TARP), signed into law by President George W. Bush on Oct. 3, 2008, which allowed many institutions like Goldman Sachs and Bank of America to continue to do business.

In the aftermath of the meltdown, banks and credit unions are being asked to carry more “reserves” — that is cash-on-hand as a proportion of their assets. There are also more stringent requirements regarding lending.

When asked about the general health of the credit union system during these two years of market downturn, Blumberg said, “Wauna did not get involved in the sub-prime market at all. In fact, for the most part, credit unions did not do that kind of lending. But some were hurt by other investments — I can’t say that we got off unscathed. The whole financial industry took a pretty big loss because some surplus cash went into investments.”

“At Wauna when we have surplus cash, especially on the corporate level, it can go into investments. So we got hurt on some investments at the corporate level and at the corresponding banking relationship level.”

A correspondent bank has a partnership with a credit union or smaller bank, generally, to assist with transfers or other administrative services on behalf of its partner institution. Correspondent banks sometimes act as the fiscal agents used to conduct business in foreign countries or to administer financial transactions abroad where a bank or credit union does not have a branch.

“As a credit union system we all put money into NCUA — all the credit unions did in order to bail out the industry. We all contributed toward a big pool that covered the losses on those toxic loans on those securities [that were purchased as investment vehicles],” Blumberg continued, “You take Bank of America and some of those big banks — the tax payer anteed up so they would not go belly up. We decided to take care of circumstances internally and now we’re actually in better shape.”

The insurance arm of NCUA is the National Credit Union Share Insurance Fund (NCUSIF), which maintains “at or near 1.3 percent of federally insured credit union deposits.” By law, federally insured credit unions must maintain 1 percent of their deposits in the NCUSIF to insure credit union members funds up to $250,000. As the NCUSIF website says “No tax dollars have ever been placed in the Fund, and no member has ever lost money insured by the NCUSIF.”

Future plans

Commenting on the health of their institutions, Chapman said, “During the past two years, we may be the only credit union locally that has added two branches. During these challenging times, we actually grew and were productive.”

“Yes, we opened a branch inside the Astoria Safeway,” said Blumberg, “and another in Scappoose. Last year we were the third most profitable credit union in the state of Oregon.”

When asked about his general prognosis for the anemic economy, Blumberg said, “I think the economy is getting better, but ever so slowly”

“Economists do not have a model for how to get out of this thing because we have never experienced anything like this in the past. It will take a long, slow climb to get out of this deep recession. We’re slowly gingerly grinding our way and climbing our way out of this.”

During these tough economic times, Blumberg sees the WFCU as providing another financial institution for Pacific County citizens to choose from, an institution with competitive fees that uses its deposits to lend back into the community.

“Our terms and rates and fees are more affordable. And we belong to one of the largest networks of ATMs — I think it’s 8,000 or 9,000 ATMs — that spans the nation.”

“Unlike banks which act individually, credit unions have shared branching. The credit union industry acts cooperatively. So we’re part of a shared branching network where you can make a deposit or withdrawal.”

Small business support

There is another aspect of community service that both Chapman and Blumberg feel Wauna can take credit for. CEO Blumberg said, “We really like small businesses and work to support them with our business loans program. Our sweet spot is $500,000, although we make loans down to $5,000 and up to $1.8 million. But usually if a business needs that higher amount, they are going to the bank and we don’t want to compete with the banks. We’re really focused on small business.”

Blumberg goes on, “And if you look at where the job growth is in America, it’s in the small business sector. Right now we are capped at 12 1/4 of our assets for loans but we have a bill before Congress at this moment to raise that cap to 24 percent so that we can put more money unto loans.”

When asked what the credit unions goals are with regard to their expansion into Pacific County, Blumberg says, “Overall, my wish is really to focus on the community. We’re there to serve our members and the community and to use what the credit union has to offer. I’d like to remind people that we’re a cooperative and not for profit — any monies we do make, in term of loans, go back to members and we don’t take any profits for ourselves.”

Chapman echoes this sentiment, “We don’t really look at ourselves as competing with your other institutions on the Peninsula. This is more just to provide the services to residents of Pacific County who have requested the services and who would find our services convenient to use.”

“Now, people have a choice.”

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