Sunset Science Park Federal Credit Union ($29.8M, Portland, OR) began as a credit union serving the employees of an electronics company 10 miles west of Portland, OR. It now serves 2,000 members in the community of Cedar Mill, operating out of just one location. The credit union scores high in rankings in Callahan & Associates’ Return to Member and Return to Borrower. Judy Makela has been the chief executive officer of Sunset Science Park FCU for the past 31 years.
You’ve had very good numbers lately. What’s the source of your success?
JM: You might boil it down to people and partners. We’ve been fortunate with both. Let me tell you about some of our people. Terry Taylor is a marketer with whom we contract. He knows credit unions very well. He’s passionate about what he does, and he is very good. We focus on our community ─ Cedar Mill ─ and so does Terry. In fact, he is president of the Cedar Mill Business Association. The CMBA is key to our field of membership; any person in a company that is a member of the CMBA can join our credit union. Terry, of course, is a big help to us.
And then there is Rhonda, our mortgage expert. We are more than 90% loaned out, and without her mortgage skills I’m not sure we’d be 50% loaned out. She’s had 23 years of experience in mortgages.
We also have an expert in IRAs. Debbie knows all the answers. Members know she’s not guessing, and this builds confidence. Members trust us with their money. Employees are key.
You mentioned partners.
JM: We couldn’t be anywhere near where we are without outstanding partners. I’ve been here 31 years. For the past 23 of those years we have used CompuSource Systems as our core processor. We use DMS out of Idaho for home banking, which includes text banking, on-line deposits, and tell-me-when alerts. DMS does a super job for us at a reasonable price. Then there is one of our best finds: Rex Stevens of iParse, not far down the road in Beaverton, OR. He’s been in technology all his life. When he comes up with a super product for credit unions, we are one of his first calls. He created the iPhone, iPad, and iTouch apps for us, allowing members to do business, including paying bills, with the credit union from those devices.
We have other capabilities for mobile banking, debit cards, and quick application for loans. For our size, we have unusually good technology capabilities, and our members have reacted favorably to this. Sixty-one percent of our members use e-statements.
How do you find good partners?
JM: I read the trade journals. I run across small companies that are offering good product at small-company prices. I think I like to find partners that are like us ─ ones that answer their own phones and know the people they are dealing with.
Tell us about your lending.
JM: More than 10 years ago we went to Rex Johnson for consulting about lending. Rex did a great job for us, really revamped our loan policy.
Most of our lending is in mortgages, and as I said, Rhonda is vital to the effort. You might say we have concentration risk, because 70% of our money is in mortgages. But of this, only 10% is in 30-year mortgages. Nearly everything else is for less than 10 years. We are cautious. We conduct value checks and run credit reports every six months. Most of our mortgages have less than 70% loan-to-value ratios and many are below 50%. We haven’t put out a loan with greater than 80% LTV in more than a year.
We’re happy with this kind of lending portfolio. We really can’t do very well with car loans on account of the competition.
What are some other things that set you apart?
JM: We like to spotlight members and their small businesses on our website. This is important to people because small business is key around here. In addition, we schedule regular get-togethers in our building for our members, pulling up chairs and serving small dinner snacks and drinks. We normally get a dozen or two people for these. The subjects are: Estate Planning, Home Buying, Resume Writing, Interviewing, Understanding Credit Reports, Medicare Enrollment, Downsizing to a Home Office, and the like. People respond well to this. Also, we answer our own phones. For most of our members, we are their preferred financial institution.
What do you feel are the advantages of being small?
JM: There are quite a few. Loyalty from members is an important one. But there is also the ability to respond quickly to situations. There is being able to help members one-on-one. There is more flexibility in policy. And, although I am not sure it is a function of being small, but there is continuity. All of our co-workers here have been at the credit union for between 10 to 22 years, and I’ve been here 31 years. When we greet members by name, it’s because we really know them. It’s not like a Safeway employee greeting you by name; they are directed to do it and it’s a little false. Here it’s genuine; the members know it is and appreciate it.
Can your methods be replicated by others?
JM: Sure. Use common sense. Work with good people and good partners. Definitely analyze but then go out and use your intuition if it has been trustworthy in the past.
What are your plans for the next five to seven years?
JM: We understand the future is in our youth. We have had a local high school intern, Matt, with us this summer. Our plans are to move in the direction of having an in-school branch of the local high school, and we want to work with the local grade school on financial literacy.