Do you know how the largest member-owned financial institution in the Monterey Bay area came to be? Beginning as Santa Cruz County Teachers Federal Credit Union in 1957, Bay Federal Credit Union has a detailed history of making significant impacts amongst local communities.

Bay Federal celebrates its birthday on November 8, marking this their 66th year of upholding the value of “People Helping People.”

Credit unions are not-for-profit financial cooperatives that accept deposits, make loans, and provide a wide array of other financial services and products. Although they offer many of the same products and services as banks, credit unions are unique because they are member-owned and governed by board members elected from the membership. All credit union board members volunteer their time to serve the greater good of all members.

While Bay Federal and many credit unions today are community-based and open to a wide field of membership, historically credit unions were formed by smaller groups with a common interest such as the same employer or trade.

Teachers Helping Teachers

Bay Federal began as the Santa Cruz County Teachers Federal Credit Union, born to eight local schoolteachers in the living room of Ethel Young after seeing a need to resolve the financial hardships facing teachers with modest means and no income during the summer months. In 1957, after collecting membership dues, the first loan was used to purchase a baby crib for $50, demonstrating the basic economics of the credit union philosophy: a connected community pooling their assets to support each other’s financial needs.

Six years after the conception of Santa Cruz County Teachers Federal Credit Union the organization was able to establish a physical presence. In 1963, the first office opened at 2034 N. Pacific Avenue in Santa Cruz, providing members a place to conduct their everyday banking.

Bay Federal Credit Union
Bay Federal’s first office. Credit: Bay Federal Credit Union

A Time for Growth

The Santa Cruz County Teachers Federal Credit Union welcomed a name change in 1979, becoming Santa Cruz County Schools Credit Union, before further expanding its membership and finally landing on Bay Federal Credit Union in 1983. Followed by a year of changes, 1983 would be the start of steady and substantial growth through a series of mergers and expanding membership guidelines.

The expansion started that same year as the employee-based credit unions of Lipton and Santa Cruz City, both smaller in scale, became part of Bay Federal. The field of membership expanded to include local Chambers of Commerce in 1986, and Dominican Hospital Employees Credit Union merged with Bay Federal in 1991. Merging with these smaller institutions and retaining their membership provided a mutual benefit by combining resources, finding strength in numbers, and allowing for the continuation of the credit union philosophy in an increasingly competitive banking environment.

Bay Federal Credit Union
News clipping from the groundbreaking of the Watsonville Branch on Main Street. Credit: Bay Federal Credit Union

Growth was not just measured by the number of members. The expanded membership combined with new milestones in assets prompted the addition of a branch on Freedom Boulevard in 1994, allowing additional support to south Santa Cruz County.

More significant achievements were reached in 1995 when the Bay Federal corporate offices and flagship branch opened in Capitola on Clares Street, where they remain today. In addition, 1995 brought the welcoming of Carrie Birkhofer into the position of President and CEO after having spent the previous six years as the Executive Vice President and Chief Financial Officer. Just one year later, the famous Wrigley Employees Credit Union joined together with Bay Federal as the Credit Union reached the milestone of $100 million in assets.

The Whole Community is Welcome

1997 changed the course of the Credit Union when they were granted a community charter. This charter allowed for exceptional growth as a financial institution, now allowing all people who live, work, worship, volunteer, or attend school in Santa Cruz County the opportunity to join Bay Federal. With a now rich history and tradition of exceptional member service, friends and neighbors of longstanding credit union members were able to jump on board the credit union movement.

In 2003, Bay Federal expanded their community charter to serve a greater population along the Central Coast. The charter would now include the two neighboring counties of Monterey and San Benito. In 2005, the achievement of $508 Million in assets and 51,000 members prompted Bay Federal to expand with a new branch in Aptos and the opportunity to offer business services to local businesses.

Resilience and Technology

Undoubtedly, the challenges of the economy soon began impacting not just Bay Federal but their employees and membership. After the financial crash of 2008, Bay Federal worked to support its members as much as possible by providing over 600 loan modifications, financial counseling, and offering support to those impacted by layoffs and the struggling economy, aiding many in keeping their homes and assets.

Bay Federal Credit Union
The interior of Bay Federal’s previous main branch in Soquel on Park Avenue. Credit: Bay Federal Credit Union

The efforts of the Credit Union amongst the community did not go unnoticed and they were awarded the first ever Governor and First Lady’s Medal of Service Award as the State of California’s Small Business Volunteer Program of the Year in 2010. In 2013, that trend continued, and for the 10th consecutive year Bay Federal had 100% of employees volunteer their time and raise money within their communities.

From 2015 to 2017, the growth of technology in the financial industry skyrocketed and Bay Federal unveiled a new, cutting-edge online banking platform, BayFedOnline, and a BayFed Mobile app enabling users with the ability to complete transactions from anywhere. In addition, adopting EMV-enabled chip cards and upgrading their card systems to integrate Mobile Wallet technology allowed for safer and more convenient payment options.

In 2018, Bay Federal was named one of Credit Union Journal’s “Best Credit Unions to Work For” and followed it up by taking the top spot in that category in 2019. Meanwhile, President and CEO, Carrie Birkhofer was selected as Woman of the Year by the Santa Cruz Area Chamber of Commerce, celebrating her longstanding and tireless commitment to the community.

Bay Federal Credit Union
A group in front of the new Capitola Branch on Clares Street when it opened. Credit: Bay Federal Credit Union

Unbeknownst to the nation, 2020 would disrupt life as we knew it in far-reaching ways. Bay Federal Credit Union demonstrated its ability to pivot and adapt to rapidly changing circumstances. In response to the ongoing pandemic and devastating local wildfires, the Credit Union sprang into action to expand services and created new ways to support their membership. This included emergency loans for COVID-impacted members and wildfire evacuees, payment deferrals, and participating in the Federal Paycheck Protection Program to help small business owners. The framework built in 2020 allowed Bay Federal to quickly offer the same emergency loans and resources to victims of destructive floods during the winter of 2023.

Today, Tomorrow, and into the Future

Today, after 66 years, Bay Federal is 86,000 members and 2,400 local businesses strong, with more than $1.6 billion in assets, 7 branches in Santa Cruz and Monterey Counties, competitive digital banking options, home loan solutions for this community’s unique housing challenges, always competitive deposit rates (no money going to far away shareholders!), and a continued commitment to make a real difference in the financial lives of the people in the communities they serve.

Learn more about Bay Federal Credit Union by visiting It is easy to apply for membership online or in branch.

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