Frontier Financial celebrates its 50th anniversary this year, which Rodela attributes to a credit union’s “cooperative spirit.”
“We (the credit unions) are the best kept secret,” said Rodela, who’s worked with a variety of unions for more than 30 years. “And we’re trying to get the word out.”
Frontier Financial was chartered in 1958 by Washoe County and primarily serves the county government and Renown Health, Rodela said, because Frontier has “grown up” with both entities understanding how both operate.
The credit union currently has about 8,600 members and has about $81 million in assets. It is owned by its members, as opposed to banks being owned by stockholders, and a member-elected board offers its services voluntarily in the oversight of the union’s financial status, Rodela said.
The credit union offers its consumers traditional checking and savings accounts, but also seeks to remain competitive with auto and home loans and second mortgages. It’s a struggle, Rodela said, because it has felt the effects of its consumers’ distress, which may be indirectly touched by events other than job losses or the tightening of their financial belts.
“There are factors of people who are divorcing, causing some people to not be able to make their obligations,” he said.
It’s a challenge to balance consumers’ needs while minimizing the possibility of loss to the institution, Rodela said, including working out interest rate plans with clients’ loans.
“We are seeing people get a little bit behind,” he said.
One way to help distressed members is through term-extension agreements in which Frontier compromises on an interest-only payment feature without penalty.
But sometimes it’s just not enough and doesn’t end happily, Rodela said. The credit union has been involved with three recent foreclosures.
“We had to bow out of one because we were the second mortgage holder and then we’ve had two instances where we had to take the houses back. One was due to illness and the other was due to divorce,” he said. “It’s unfortunate.”
The trend is trickling down into car loans as well, he said.
“We’re seeing that kick in now as well. People could be having a tough time, they’re being laid off and can’t afford to pay their loans” as they work to keep their homes, Rodela said.
“It’s a precarious time we’re in,” he said. “We can’t just grant loans to anybody. We’ve got to underwrite responsibly.”
Recently, Frontier Financial chose to convert from a federal to a state regulator that works more closely with about 16 of 29 other credit unions in Nevada.
In its daily business activities, David Combs, the branch manager of Frontier’s Sparks location on Sparks Boulevard, said the credit unions demonstrate a “cooperative spirit” with each other and that their only true competition is the banks.
“I just joined this credit union relatively recently and, coming over here, it’s really more of a cooperative sense,” Combs said. “I also serve on the Nevada Credit Union League as treasurer and each month we hold meetings for any members of any of the credit unions in northern Nevada where we can get together and discuss happenings that are going on in our current economy today. It’s very open for ideas and communication back and forth, which you don’t see a lot of within banking.”
Rodela said by using credit unions as opposed to banks, the average customer saves anywhere from $400 to $800 with smaller loan rates and fewer fees. And many times, people don’t know that they have access to their credit union just about anywhere — even if there is no physical location — by going to other credit unions that are part of a cooperative network.
Ultimately, Rodela said, the consumer’s lifestyle plays a major role in their acceptance into the credit union.
“We look at character and capacity (and collateral) for membership eligibility, but character probably weighs the most, how they’ve carried themselves.
“They need to have a positive livelihood, recreate, pay their other recurring bills and we’ve got to factor into that,” Rodela continued, “but we’ve also got to look out for their financial well-being, and we’re not doing them any favors by giving them a loan that’s going to put them into dire straits.”
According to the California-Nevada Credit Union League, there are about 8,000 credit unions nationwide.
The Credit Union National Association estimates there are 170 million credit union members in 97 countries worldwide.