OCEANSIDE -- Say goodbye to check-cashing outfits, payday loans and living paycheck-to-paycheck. Start learning about financial stability, establishing credit and even buying a home.

That is the message North County's newest credit union, Faith Based Federal Credit Union, is taking to lower-income people who live or work in Oceanside, or who have an interest in helping reduce poverty through better education and financial services.

Faith Based Federal Credit Union opened its doors at 620 Mission Ave. last month after an organization effort that lasted more than two years. Daniel Scott, a retired banker who is president and chief executive of the new credit union, said its role goes beyond the financial: People on a solid financial footing help stabilize a community.

What they are

Credit unions are not banks. They are cooperative, nonprofit financial institutions owned by their members. Unlike banks, credit unions by law cannot accept the public at large as members.

The members must have some common bond by belonging to what is called a "field of membership," said Bob Davis, a supervisor of examiners for the National Credit Union Administration, the federal agency that charters credit unions. The agency insures credit union deposits for up to $100,000.

Although Faith Based is mostly aimed at low-income people, Scott said, there are "a whole litany of ways" in which people can qualify for membership. One is to live, work, attend school or church or do volunteer work in the 92054 and 92055 ZIP codes, which the federal government considers low-income areas. This is defined as regions where the average household income is no more than $37,000 a year, Scott said.

Another path

Those who don't otherwise qualify can join by becoming a member of the advisory committee of Faith Based Community Development Corp., the organizer of the credit union.

"This gives us the opportunity to broaden our membership base to include more folks, as opposed to be exclusive," Scott said. "You can satisfy the membership criteria in a variety of ways, and it doesn't have to be driven by your income. In other words, you don't have to satisfy all the membership criteria -- you've only got to hit one of them."

As a regulator of credit unions, Davis said he provided advice to Scott and the other organizers of the credit union on how to qualify for a charter, but the organizers did all the work. The agency announced on March 7 that it had granted the charter, making Faith Based the first federal credit union chartered in Southern California since 1997.

Davis said Dennis Dollar, the National Credit Union Administration's chairman, decided a few years ago to encourage formation of credit unions to serve low-income communities whose residents often are left outside the financial system.

Small credit unions such as Faith Based usually offer "plain vanilla" services such as savings or checking accounts and automobile loans, Dollar said. Credit unions with more assets can offer more advanced services such as commercial loans.

What members get

Scott said membership in Faith Based goes beyond those basic services to include a "comprehensive economic empowerment strategy." That means counseling, workshops and informational literature to help members take control of their finances.

All these services are interrelated with one another, and with the credit union: The educational programs help people understand how to manage their money, while the credit union helps members put that knowledge into practice.

"We have financial literacy training classes, and the credit union will become the vehicle to provide long-term sustainability in terms of providing financial literacy training," Scott said. "It's a means of helping to teach folks some new behaviors in order to leverage the resources they do have. That's an important precursor to helping people start building wealth."

The credit union can be contacted at (760) 435-0600 or on the Web at www.fbcdc.org.

Priming the pump

In a low-income area, lack of capital hurts the community, not just the individuals living there, Scott said. These areas aren't favored by financial institutions as places to invest or even have a physical presence. Setting up Faith Based is a pump-priming step to stimulate economic growth.

"We have successfully raised, through God's grace, raised over $1.2 million in new capital that we've brought into this region, capital that was not here prior to the formation of the credit union," Scott said.

"That's capital that we can use to help people who might normally be going to the pawn shop or the payday loan operators or the check-cashing operators, or in some instances the local liquor store or grocery store," Scott said. "It translates into those who can least afford to pay those services are the ones who are essentially taken advantage of. What we are trying to do is provide an option."

Building wealth

Especially in Southern California, home ownership has proven a reliable way to become financially stable. Low-income people often have financial problems that prevent them from qualifying for a home, such as a stable credit history. But even aside from that, the constant increase in housing prices make home ownership out of reach for many.

"As a nonprofit, we're also looking to enter the arena of producing affordable homes for working families," Scott said. "We think that once you exceed $200,000 (in home price), many hard-working families are excluded from home ownership. Home-buyer education is great and wonderful, but if there's no homes available for people to buy, it's kind of a waste."

Many of those trained in financial literacy have had to leave San Diego County to find an affordable home, Scott said. Faith Based is now considering potential projects to provide homes in Oceanside.

Another approach is to bring in employers, who have become increasingly worried that the high cost of housing is chasing away employees. Scott said the credit union is talking with the city of Oceanside, the San Diego Workforce Partnership and other agencies to put together such a program.

The role of faith

Despite the credit union's name, prospective members are not subject to any religious test of qualification. Faith comes in with the credit union's mission: Although the immediate role is financial, a credit union serving low-income members can produce a social benefit, Scott said.

"I believe that God has called us to do the work that we do," Scott said. "It's our faith that calls us to do what we do. In terms of the social problems we've experienced in this nation, the reality is a lot of these problems have economic roots. We do what we do because our faith calls us to do it.

"We're not a church. We seek to collaborate and partner with churches. One of our objectives is to take the credit union to as many churches that will have us, to provide financial literacy training, to be able to help people acquire the information, knowledge and tools they need to improve the quality of their life. … Our faith teaches us that we need to do more than provide a method where people can be fed. We need to teach them how to feed themselves."

Contact staff writer Bradley J. Fikes at (760) 739-6641 or bfikes@nctimes.com.