Santa Rosa credit union CEO to retire after working for the “good guys” in the financial sector

Todd Sheffield got into the credit union sector 33 years ago for a simple reason.

“I thought they were the good guys in the financial world,” said Sheffield, who will step down June 30 as chief executive officer of Community First Credit Union, a Santa Rosa-based financial cooperative owned by its 60,000 members.

After nearly two decades leading Community First, Sheffield said he still believes in the mission of the sector, which proved its mettle after a challenging year with the coronavirus pandemic.

At the beginning of the outbreak, his credit union deferred 4,652 consumer loans, about 20% of its portfolio. Community First also has waived more than $50,000 a month in common fees, such as “rush” payments over the phone or inactivity of an account or card. Those actions have given members some breathing room to help pay bills.

“You’re not just trying to make a buck. Everyone wants to make a buck or two. There is nothing wrong with that. But that wasn’t the primary purpose that drew me into credit unions in the first place,” said the 62-year-old Sheffield.

Credit unions, which are owned by their members, operate as a nonprofit and are not taxed. Banks are a for-profit financial institution that are either privately owned or publicly traded.

But helping members doesn’t mean a credit union needs to give up growth needed to be sustainable. Under his leadership, Sheffield has seen Community First’s assets increase from $91 million in 2001 to its current $664 million. A significant boost came when Community First merged in July 2017 with Mendo Lake Credit Union. The two institutions, both founded by local schoolteachers, had $457 million in combined assets at the time.

So how do you replace a leader that for many employees is the only boss they have known?

“We’re just looking for a clone,” John Burke, chair of the credit union’s board of directors, said of Sheffield’s replacement. Burke noted that corporate culture under Community First with Sheffield at the helm has been “open, supportive, rewarding and fun.”

His tenure coincided with massive changes within the financial services sector. The Gramm-Leach-Bliley Act of 1999 allowed large banks to grow much bigger and venture into new areas beyond traditional banking. But such deregulation led to the Great Recession when banks made too many loans to unqualified borrowers and packaged them off to investors, which led to a banking crisis that required a massive federal bailout in 2008. The sector now faces a growing challenge from “fintech” companies — including SoFi, which has an office in Healdsburg — that offer digital-only services primarily targeted to younger clients.

“The credit union has been just really steady the whole time,” Sheffield said.

An accountant by training, he has also served as CEO at Sonoma Federal Credit Union, chief financial officer at Redwood Credit Union and controller at Cooperative Center Federal Credit Union.

While to some extent overshadowed by its larger neighbor, Redwood Credit Union of Santa Rosa, Community First has grown into the second-largest credit union in the region by offering some customer benefits that are not available elsewhere. That includes a zero-fee loan to 4-H students and a starter savings account that pays up to 7.07% annually for those under 18 years of age as well as a checking account that pays interest.

And it has a physical presence in communities, with 11 branches across the North Coast. That strategy paid dividends about a decade ago during the uproar over the big bank bailouts, which unleashed populist anger that still lingers within the United States. The apex was “Bank Transfer Day,” a movement for customers to move their accounts from for-profit banks to credit unions by Nov. 5, 2011.

“We did focus groups … and I kind of came away with the conclusion that for some people, they may not use the branch, but that they want to drive by and see it,” Sheffield said. “And it was important way back on Bank Transfer Day. We had just opened a bunch of small branches, so we had a really nice brick-and-mortar presence.”

Community First’s membership grew more than 20% over a three-year period until the coronavirus pandemic as more customers realized the importance of where they parked their money, said David Williams, chief marketing officer for the credit union.

The influx of customers to the Santa Rosa credit union mirrored the growth of other efforts to shop local that have been well received within Sonoma County. The trend is reflected in customers’ desire to patronize family businesses that span generations and the growing number of B Corporations, which must meet standards on such items as environmental protections, worker treatment, relationships with their local community and how they are governed.

Williams compares local credit unions to craft brewers: Both have become more popular as customers shift their spending from big national and international companies to homegrown businesses.

Yet even with the socially conscious ethos, Sheffield realized that Community First also had to be technologically relevant or it would not attract younger customers.

Community First claims it was the first locally based financial institution to unveil a smartphone banking app so customers could make remote deposits and pay bills. It followed that up with a virtual-assistant bot, named Maggie after the first paid employee of the credit union and later its first president, Maggie Wattles. It also offered contactless debit cards — where you wave the card over a scanner and it registers the transaction — during the early days of the pandemic.

“We weren’t a big thing where we could just spend whatever. We had to be more creative,” Sheffield said. “We had to do it without spending millions of dollars because we didn’t have it.”

One major accomplishment for Sheffield is that he has never had to lay anyone off at Community First, which has a staff of more than 150 employees. That feat is rare in the financial services sector given the ebb and flow of the business, especially in such areas as mortgage lending that can be boom or bust. The credit union also offers employees perks, including offering up to a 7% match of a worker’s salary on its 401(k) retirement plan.

“Nobody is going to become a millionaire working in Community First. But I've tried to build a place that people can have a career, you get a regular paycheck and can afford to live here so you can build a career and you can also retire,” Sheffield said.

He said he has been guided in his life and career by a mantra that is well-known to many of his employees and not surprising coming from an accountant: You have to spend less than you make.

“I'll tell you what I tell my daughter, spend less than you make. A lot of people that have made a lot of money still go bankrupt because they spent more than they made,” Sheffield said.

You can reach Staff Writer Bill Swindell at 707-521-5233 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.