WESTBROOK, Maine – Despite its small geographic size and a downturn in the paper production industries that have economically affected one out of four residents here, Maine's credit unions still manage to have a penetration rate of 48%, making the state the fifth strongest in the nation in terms of membership penetration. Maine's 77 credit unions have combined total assets of $3.5 billion, with three credit unions surpassing the $100 million in asset mark earlier this year, said Jon Paradise, director of communications for the Maine Credit Union League. While that number may not be significant to the growing number of billion-dollar asset credit unions nationwide, Paradise said the increased membership here is being fueled by those looking to park their money in "safe, stabile environments" and the recent surge in refinancing. Eight credit unions have $100 million in assets with Maine State Employees Credit Union being the largest with $186 million in assets and more than 20,000 members. The average asset size here is $38.5 million, according to MCUL statistics. "Two years later, the fallout of 9/11 continues," Paradise said. "People are nervous, more members feel safe knowing their money is in CDs and money market accounts at the credit union down the street. Overall, credit unions are doing a good job of reaching out to and attracting potential members." Indeed, more than 600,000 members belong to credit unions with one out of two residents here belonging to one, Paradise said. Many of those members have been affected by the plant closures, layoffs and loss of manufacturing jobs across the state, especially in rural areas that have literally depended on paper and shoe-making companies for employment. "When you have mills sitting idle for six months or even a plant closure, it hits home for so many people," Paradise. One credit union is involved in a legal proceeding with a Maine-based company. Great Northern Paper Company is being investigated to determine if it was insolvent in May 2001, a year and a half before it filed for bankruptcy. If fraud is proven, a trustee for the bankrupt estate would try to convince a judge that Katahdin Federal Credit Union is not entitled to be repaid $3.2 million from the land transfers that took place in June 2001 between Great Northern and its parent company, Inexcon Maine. Meanwhile credit unions work against the odds despite Maine being among the lowest in the nation in average household income, Paradise said. Because the state relies heavily on manufacturing, prospects for economic growth don't look promising any time soon. "It's been pretty stable (for credit unions) but it's estimated that growth will be very slow here over the next few years," Paradise said. "Maine credit unions are doing a good job of counteracting the `if it's too good to be true, then it probably is,' message. As for the relationship with the banking community here, Paradise said credit unions have a "pretty solid" rapport with the community banks. The league has worked with the Maine Bankers Association on several bills and maybe because "everyone is facing the same state budget issues," lately, the atmosphere has been calm. "We don't want to be acrimonious," Paradise said. "We recognize the importance of promoting strong political relationships with legislators. It carries more impact to be proactive than reactive." [email protected]