First Entertainment has long-running role in Hollywood
EmptyWhat do an Oscar-winning film editor, a KTLA-TV reporter and Elvis Presley have in common? All three are current or former members of First Entertainment Credit Union, the financial institution that is now celebrating its 40th year of doing business, serving more than 53,000 members throughout the industry.
Four decades after it was founded, FECU has become a powerhouse with 137 employees and $625 million in assets -- mostly made up of members' deposits but with a healthy cushion of some $60 million in capital. As such, it is among the state's bigger credit unions, those nonprofit groups that quietly provide checking accounts, loans and other financial services for their members, routinely at a lower cost than privately owned banks.
"They are the dominant entertainment credit union in California," says Bill Cheney, president and CEO of the California Credit Union League. "And they are unique in that they serve the entire entertainment industry and not just a specific member group."
While FECU was established by and for employees of Warner Bros., it has expanded its membership far beyond the studio. "Our board decided that the credit union would be able to provide a better range of services if we were a larger size," says president and CEO Charles Bruen, who recently celebrated his 20th year on the job. "They wanted to diversify the risk. So, in 1985, we decided to (represent) other companies, and now, we serve 600-700 different companies on both coasts -- all the major studios, most of the radio stations, the unions and support companies like Panavision."
Membership grew as FECU began a series of mergers with other smaller credit unions -- part of a nationwide trend toward consolidation. There are now only about 8,600 credit unions nationwide, compared to more than 24,000 three decades ago. "The credit union industry has mirrored the banking industry," FECU marketing vp Roy MacKinnon says. "In the old days, people had bank accounts, and then they would get a loan from a credit union. Today, they want one-stop shopping."
Now, FECU is an established organization with nine branches in the Los Angeles area and another in New York. It has been a pioneer among credit unions in creating a Web site (only the sixth in the nation to do so) and in offering free online home banking. In addition, it provides complimentary counseling and financial advice to its members.
FECU also has taken steps to be eco-friendly, offering its members a "green loan program," now 4 years old, which is designed to help them buy environmentally friendly cars or make environmentally sound changes to their houses thanks to loan-rate discounts.
But it also backs all sorts of loans. Among the 100,000-plus loans the credit union has arranged were sums meant to pay for agents' fees and adoptions -- one loan even was used to cover the expense of a customized bathroom trailer for VIPs that featured inlaid ebony.
Most loans are for more basic things, however. KTLA reporter Gayle Anderson took out a loan to cover medical bills and says she plans "to do all my business there."
So does editor Joel Cox. "They helped me get an old car when other people wouldn't think of loaning against it," recalls the Oscar winner for 1992's "Unforgiven" who is a charter member of the credit union.
Elvis also got a car loan from the credit union -- or rather from MGM Credit Union, one of those that merged into First Entertainment.
But the institution is facing certain immediate challenges. "Younger folks are not finding credit unions as viable an option as we would like," Bruen says. "We are not certain what causes that -- maybe banks have done too good a job capturing students."
Bruen also is concerned about improving profit margins -- an important consideration even for a nonprofit.
"You have got people here who are savers and some who are borrowers," Bruen says, adding that it is critical to ensure that the cost of borrowing is less than the payment for a loan. "That gap is where we generate our income. But today, there is very little difference between what you earn on a car loan and what you pay on the certificate (the deposit). We have a promotion going on now where we are paying 6% on a deposit/certificate, and we are charging 5%. You can't do that very long! There is a big squeeze not just for credit unions but also banks. Financial institutions are forced to be more efficient."
Bruen knows plenty about efficiency, though. A former marine who served in the Vietnam War, he joined the company after entering the finance business following his discharge; he has remained with it since 1987. "Chuck Bruen has a great reputation in California," Cheney says. "He is highly regarded by his peers and is most definitely a man of integrity."