The nation’s largest faith-based credit union recently reached $1 billion in assets by serving a market it says most lenders don’t understand.
The Evangelical Christian Credit Union of Brea has grown at a clip of 20% a year in the past 10 years, and doesn’t see a bottom in the new customer pool.
“Your local bank is not going to equip a church in Papua New Guinea,” said Mark Holbrook, president and chief executive of ECCU.
The exterior of ECCU’s offices looks like it could be any corporate operation. But inside, its halls are adorned with scripture reminding the employees of the credit union’s true mission,to serve Christ.
Once a week, the staff meets to conduct business, pray and sing.
Because it is Christian, ECCU fills a niche that Holbrook feels traditional banks don’t understand.
Members join primarily for the religious connection, and also because they want to work with someone who understands them, according to Holbrook.
In the mid-1980s ministries were often rejected for loans by banks that didn’t understand them, he said.
That’s starting to change. Churches are becoming players in land development and serving as centerpieces of masterplanned communities.
ECCU, which was founded in 1964, says its edge over traditional lenders is its ability to understand donations and fundraising campaigns as income.
“Not everything translates to numbers,” Holbrook said. “You don’t find other lenders in inner cities or ethnically diverse areas.”
Even in economically challenged areas, Holbrook sees churches as strong parts of the community that will always be supported.
Traditional lenders accustomed to looking at the earning potential of businesses don’t understand how that can be applied to churches, according to Holbrook. And without easy-to-understand earnings, banks are hesitant to lend or foreclose on churches, he said,especially in the shaky financial environment of today.
But Holbrook says he’s a believer in churches. Last year, ECCU reported a $17,000 loss on $2.7 billion worth of loans. It has only had two or three defaults in the 28 years Holbrook has been with the bank, he said.
The Christian-affiliated institution follows all the federal rules of any other credit union. There’s just one requirement: ECCU only accepts members who are designated as evangelic, a term that encompasses several Christian-based faiths. It is the largest faith-based credit union in the country, Holbrook said.
It’s more than twice as large as its nearest competitor, the Christian Community Credit Union in San Dimas. ECCU serves 3,000 missionaries, 2,000 ministries and several thousand individuals.
All of its owners have an equal say, according to Holbrook.
While it may be smaller in terms of customers than the major credit unions, it outpaced the bigger institutions in growth.
In the past 11 years, ECCU outpaced the growth rate of other credit unions,those with assets of at least $100 million,by 23% (excluding those who grew through mergers), according to ECCU’s chief financial officer, Brian Scharkey.
Nearly all of its lending business and about 70% of its deposits come from ministries.
As a not-for-profit it is not allowed to have outside stock investors and its earnings must be used for the business.
The organization sells off two-thirds of all loans to other credit unions, banks and ministry partners, which it says are an affiliate of ECCU. It also sells notes to the public.
It counts about 300 workers, many of which come from working in evangelical ministries, according to Jac La Tour, spokesman for the credit union.
Operations are based in Brea at a 125,000-square-foot building built in 2002. It also has a branch office in Colorado Springs.
ECCU owns the 17.5 acres of land that its offices are on, and also leases an additional 82,000-square-foot building adjacent to its headquarters. It’s also building another 82,000-square-foot building.
When Holbrook came on board in 1975 the credit union had $2 million in assets. By the time he became chief executive in 1979 that number doubled to $4 million.
