CU Times Correspondent-at-Large

CHATSWORTH, Calif. — Telesis Community Credit Union CEO GraceMayo said gas prices are so high in Southern California thatcommuters are changing their habits.

“We're seeing a cultural change here in driving patterns as aresult of gas prices,” Mayo said. “Everyone who can is using ourMetro rail and bus systems, and our employees are car pooling morethan ever. And, we've seen more motorcyclists on the road and morepeople riding bicycles to work.”

According to gas price tracking Web site gasbuddy.com, theaverage price of 87 octane unleaded was $4.44 per gallon in LosAngeles County as of June 9, up from $3.88 only one month ago.

Mayo, a motorcycle enthusiast, said even she's consideringbiking to work to save on fuel costs. In fact, so many are garagingtheir gas-guzzlers, Mayo said her $600 million credit union hasseen an increase in voluntary surrenders and repossessions of SUVsand inefficient cars. And, she said, Telesis is not the onlyone.

Lin Holcomb, president of the California Credit Union CollectorsCouncil, concurred with Mayo's report, saying her members arereporting widespread increases in surrenders and repossessions.

“I've heard reports from numerous credit unions that members arecalling and saying 'we can't afford it, come pick it up', and asgas prices go up, more members will be doing it,” she said.

Holcomb said gas prices have not only dug into householdincomes, they've resulted in smaller paychecks, too.

“We've heard there's a lot of downsizing going on out there,”Holcomb said. “In fact, I just spoke to a woman who has a part-timejob at FedEx. She used to work 25 hours per week, and they've cutit down to five hours per week, because gas prices are hurtingFedEx, too.”

Holcomb, a special service manager at $120 million PasadenaFederal Credit Union, said it's a matter of basic budget numbers:members are working fewer hours and bringing home less income,while trying to absorb a higher cost of living.

“People are trying to keep a roof over their head, the utilitieson and food on table. Everything else comes after that, includingcar payments,” she said.

Holcomb said PFCU has been spared the loan losses that havebefallen other California credit unions, but her fellow collectorshaven't been so lucky.

“They're trying to be creative, trying to help members as bestas they can, but they also have to be realistic,” Holcomb said.“You can't give a member a $30,000 loan at zero percent interestwith a payment of $50 per month, you just can't do it. But you haveto find something beneficial that allows the member to keep theirdignity.”

Collectors are also reporting more members declaring bankruptcy,especially those upside down on mortgages and autos, because theirlack of equity makes a declaration of insolvency easy, shesaid.

And, despite PFCU's good numbers, even some residents ofprestigious Pasadena are struggling.

“I don't care if you're in Pasadena, Beverly Hills or Bel Air,people are having issues no matter where they are,” Holcomb said.“Just look at the news that Ed McMahon, who you would assume isworth millions, is in foreclosure. This is a man who refinanced hisproperty and did what a lot of Californians did. Sure, most peopledon't have $4.8 million mortgages, but it's same principle for EdMcMahon as it is for the guy from Pasadena who makes $100,000 ayear or the average Joe who makes less.”

Henry Kertman, vice president of public affairs for theCalifornia Credit Union League, knows first hand the effect gasprices are having in the budgets of members. Kertman has a 130-mileround trip commute from his coastal home in southern Orange Countyto the league's offices in suburban Rancho Cucamonga, located inSan Bernardino county.

A couple of years ago, my wife and I traded in our gas hogs fora Toyota Prius and a Honda Civic, both hybrids,” Kertman said. “Itseemed like a smart thing to at the time, but it seems very smartnow.”

Kertman has worked under a telecommuting agreement with theleague for several years, working from home one day per week;though thanks to technology, his member credit unions probablydon't realize it. He said the league has received more interestfrom employees seeking to telecommute not only to offset gasprices, but because new neighborhoods built in the last housingboom have increased traffic. Not only does it make for a longercommute, but the longer a car sits in traffic, the more gas itburns.

“When we moved to the new league offices in 2000, I-15 was wideopen and it was easy to take that route,” Kertman said. “But forlast few years, that's been the freeway you avoid, because therewas such a housing boom along that route, now many of us zigzagthrough side streets to avoid it.”

Mayo said she hasn't instituted any new telecommuting plans, butis granting some leeway in schedules to allow for bus and trainschedules, as well as encouraging car pooling. And for the pastyear, she's been rewarding employees with gas cards.

“If we really want to incent employees, we give them gas cardsinstead of the Starbucks gift cards we used to,” Mayo said. “It's asign of the times, that basic needs trump what I call plushyneeds.”

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