NORTH HIGHLANDS, Calif. - Major world events have shaped both the beginning and recent developments at SAFE Credit Union. When the credit union was formed in 1940 as S.A.D. Federal Credit Union it served Sacramento Air Depot, where the military produced and repaired aircraft. Only a few visionaries could have imagined the impact when a year later the United States went to war. By 1944, membership, which numbered 275 just four years earlier, had surged to 1,800. But just as World War II boosted assets and membership, the fall of the Berlin Wall in 1989 could have doomed the credit union. When the cold war thawed, Washington cut back on the nation's defense establishment. That meant phasing out McClellan Air Force Base, as S.A.D. was known by then. By 2000 the base was completely closed. But the credit union has prospered, thanks to some major shifts. Henry Wirz has sat in the president's chair overseeing those changes, but not before making some major turns in a career path that pointed him botony. Wirz grew up in the San Francisco Bay area, and majored in botany at the University of California at Davis. His career plans underwent a sea change the summer after graduation when he worked for the university. The chancellor conducted a session for students and educators about career options. One thing he talked about was an M.B.A. program. "That made a real impression on me," Wirz says. "Rather than go on in botany and the sciences, I decided I wanted to try to get an M.B.A. I was admitted to the program at the University of Michigan in Ann Arbor. Unfortunately, out-of-state tuition was so expensive I transferred back to the University of California at Berkeley." After earning his masters he went to work for Coopers & Lybrand, the Big Eight accounting firm. He and his wife are both CPAs. They have a son who is a sophomore at the University of California and a daughter in her senior year of high school. While at Coopers & Lybrand, Wirz worked with a wide range of clients, one of them what is now SCU. "I was impressed by how well-run SAFE was in those days. They never had any issues in their audits. The president told me he was going to hire somebody as controller. He also told me he was going to work for another five years, and hoped whoever took the new position would be a candidate to replace him," Wirz recalls. Wirz applied for the controller's job, was hired, and five years later in 1984 was selected as president. "We're a state-chartered credit union," Wirz notes. "The state doesn't designate us as a community charter, but in fact that's what we are. Our charter says we can serve anyone who lives, work or worships in six counties. Those counties have a population base of about 2 million." By the time McClellan AFB closed, the credit union had acquired more than 1,000 SEGs and opened branches outside the base, which exposed it to a broader community. "At that point we challenged ourselves to make a rapid and complete transition. We pretty much stopped soliciting new SEGS and started using our branch network and ATM network to bring in community members," Wirz says. "We rebuilt our branch system. We remodeled branches that were in a good location. If a branch wasn't in a good location we moved it to a better, more prominent location. As we opened new branches, rather than going into old, established neighborhoods, we targeted new neighborhoods where most of the housing stock was new. Our thinking was that when people move into an area they are more likely to start de novo with all their relationships." The branches are designed to appeal to families. SCU put in ample drivethrough lanes. Branches are large, at least 4,000 square feet, to allow private offices and full-service teller lines. There are game tables where children can play while their parents take care of business. Branch dcor highlights community photos and memorabilia. Branches also feature an advance service counter where members are greeted as soon as they walk in the front door. As planned, Wirz says, those branches have attracted middle America. The credit reports SCU runs on all new members show 53% of those joining have credit scores of 630 and below. "It's a very challenged group," Wirz says. "Much as we've gotten away from the Air Force base where a lot of the young airmen had these difficulties, we're now actually seeing more of those problems. So the role of the credit union as an educator and counselor is probably even more important than it was." It all traces back to the switch to a state charter in 1999. "That changed SAFE as much as anything. Our NCUA charter was not going to allow us to have as broad a field of membership as we have with a state charter," Wirz says. "We became much more active in the community. We began using mass media advertising. We sponsored community events. We encouraged the board and staff to volunteer their own time and become active in the community. "When you become community, all of a sudden your opportunities open up. A big opportunity that opened up for us was indirect lending. The dealers were getting a lot of prospects who weren't credit union members but were attracted by credit union financing. So the dealers starting signing up people to join the credit union. When we were a closed field of membership we were very limited." `With a community reach, SCU found itself gaining 400 to 500 new members a month - and their auto loans - through car dealers. Still another change involved SCU's idea of their competition. They had been the only credit union that could serve the base. Banks generally didn't pay much attention. Then, as SCU moved out into the community, it discovered the real rivals weren't other credit unions or even community banks. It was large national banks such as Washington Mutual, Bank of America and Wells Fargo. They were the financial institutions with branches in the very neighborhoods SCU wanted to served. They were vying for leases on the same prime locations. Wirz praises the role of all SCU's vice presidents in helping the credit union cope. "We work as a project steering committee. Every one of the vice presidents knows exactly what's going on. It has created wonderful teamwork that extends all the way down into the credit union," he states. "By working together this way we have become quite flexible and adaptable so we can respond quickly when opportunities do come up. For example, some branch locations we currently have came up rather quickly and we had to act promptly, put our proposal in, then mobilize the resources to open those branches." On a bigger scale, Wirz believes the cooperative spirit of credit unions has been a key to SCU's success. "SAFE believes in cooperation," he emphasizes. "We'll show you anything. If you want a copy of our business plan, we'll share it. Every one of us has the same last name - `credit union'." -

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