SAN DIEGO-The $2.2-billion Mission Federal Credit Union here may have transitioned to a community charter, but it hasn't strayed from its roots.

President and CEO Debra Schwartz told Credit Union Journal that Mission FCU remains closely aligned with the local education community that was its original field of membership, and that includes its non-profit foundation that primarily funds financial literacy efforts.

"We are very active in the community because community involvement is part of our DNA," she said. "We do a lot of school partnerships, plus we host a Mission Fed Art Walk in Little Italy downtown and we have a new partnership with the San Diego Zoo."

"Mission For Schools" is a program that teaches kids to save. Schwartz described it as a long-term strategy, noting the concept is not purely altruistic.

"We want to be top of mind when the kids are older and want that first car loan," she said. "We cannot say exactly how much business it generates down the line, but with a product like that it is important not to focus too much on statistics."

Schwartz is on the board of Junior Achievement, which provides funds for middle school students. She said the group allows students to be in a program that gives real life skills, including running a simulated business or being the mayor of "mini San Diego."

"We have a branch there [in mini San Diego], and we provide volunteer help," she explained.

Standing out in the crowded financial services market that is San Diego County is a must, Schwartz continued, saying the competitive nature of the market is "great" because "it keeps us on our toes."

"I think competition makes us stronger," she said. "Being with a lot of strong credit unions is a plus because consumers know credit unions are a viable option with a full range of products and services. I see that as a real positive. Because the credit unions in and around San Diego have a significant physical presence and an advertising presence, it helps all of us."

To keep pace, Mission FCU advertises on television, radio and billboards. Schwartz said it has staff dedicated to respond regularly to social media posts, both good and bad.


'Not a Secret'

Schwartz has logged years of experience in the San Diego marketplace, including positions as EVP at San Diego County CU and chief financial officer for First Future CU. She joined Mission FCU as EVP in 2007, taking over the helm a year later for retiring Ron Martin.

"Since I have been here I have been focusing on increasing membership and making sure we are not a secret," she said. "Last year we grew by 8,000 net new members, which was about 5.5%. First quarter 2012 has us about that same 5% level. Bank Transfer Day has continued into this year."

When banks were charging debit card fees last year, Schwartz noted Mission paid its members to use their debit cards in December: 25 cents per transaction up to $5.

"It was another opportunity to highlight the difference between banks and credit unions," she said.

The San Diego real estate market was one of the first in the nation to have its bubble burst five years ago. Schwartz noted Mission FCU had not had a real estate loss in its history until 2007.

"The school districts did not have layoffs during the recession, thankfully, but people have had spouses get laid off or their homes have lost value," she said. "It feels as if the worst is behind us. We saw dramatic improvement in 2011 and 2012 is seeing continued improvement."

Lending is "going well" in 2012, Schwartz continued, especially real estate. She said auto loans are strong, exceeding the CU's budget to date, thanks to the fact its membership is "pretty conservative," meaning they tend to go for used autos.

On the credit card front: Mission moved from Visa to MasterCard last year, which Schwartz said went well.

"We saw more new cards issued, but people are being conservative and are paying off their balances."

According to Schwartz, competition among credit unions in the county is not a big issue.

"San Diego is a big market, and credit unions have a relatively small share, so I think most of us think of the banks as our competition, not each other. I have no interest in taking share from the other credit unions. I have about 156,000 members, and I don't want to go after someone's 100,000 members when there are 3 million people living in San Diego County."

Looking forward to the second half of 2012, Schwartz said every day there is "something interesting" in the economy, "which can be a little bit frightening."

"The local San Diego economy feels like it is leveling off, but the good news is loan demand has picked up and loan losses have declined," she said. "We are profitable and our capital ratio is about 10.5%, which allows us to open new branches, stay active in the community and enhance our mobile banking offering."

Mission FCU implemented a brand audit last year and is in the process of refreshing all of its television spots for 2012. Schwartz said a special emphasis is for each ad to have a call to action.

"It is almost impossible to track exactly, but we have more new member growth than other credit unions so I think our advertising is successful," she declared.

Once in the doors, Mission FCU's onboarding efforts are defined by what it calls its "M-Power" training program for the staff. Schwartz said the overall goal is to make sure whoever is opening a new account lets new members know the CU a full-service financial institution.


Mission 'Very Clear'

"But we tailor the encounter to the member's personality and schedule," she said. "If someone just wanted to get a car loan, we let them fill out the application and get back to work. But when a young person comes in who might not know how a credit card works, we might spend a little more time. We are definitely making improvements on products per member.

"We are very proud to be part of this community," she continued. "It is the only market we serve, which makes our mission very clear. Everything is San Diego based, which makes decisioning very easy. We know our members, and whatever we can do to make San Diego stronger, we do."

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