Growth continues for credit unions Michigan credit unions continued their growth trend in the second quarter ending June 30, reporting strong net worth, lending and membership growth, despite continuing challenges in the economy. Mid-year statistics from the National Credit Union Administration (NCUA) and the Credit Union National Association (CUNA) highlight the secure financial condition and continued consumer support offered by the state’s credit unions. “Michigan’s credit unions are a bright spot among financial institutions in the state, despite ongoing difficulties in our economy. They are lending in their communities and supporting businesses and families,” says David Adams, president and CEO of the Michigan Credit Union League & Affiliates. “Our industry is focused on the needs of consumers who, as credit union members, are also owners. At a time when big banks are hard-pressed to make profits, credit unions are growing by offering consumer-friendly alternatives.” Michigan has the largest proportion of credit union members among the ten most populous states, with 44 percent of residents belonging to a credit union. Since the beginning of this year, nearly 15,000 residents
moved their money to their local credit union, bringing total credit union membership in the state to 4,448,600.
Key numbers Nationally, for the same time period, 590,000 Americans joined a credit union, to a total of 91.7 million members. • NCUA’s second quarter data for Michigan’s credit unions showed improved earnings with stronger than expected return on assets of 0.3 percent despite high loan losses resulting from a challenging economy. • The net worth to assets ratio, a key measure of financial strength, shows Michigan credit unions at 10.7 percent, higher than the national credit union average (9.9 percent), or for Michigan banks (9.2 percent). The NCUA reports that 94 percent of Michigan credit unions are well-capitalized. • As Michigan banks continued to freeze credit (12 percent decline) in the second quarter, loans by Michigan credit unions grew (1.2 percent) for the period. Specific areas included used auto loans (up 10.3 percent), first mortgages (up 2.6 percent) and credit cards (up 5.3 percent). • For the previous 12 months ending June 30, commercial business loans (member business lending) by credit unions showed strong growth, up 17.7 percent,
“Michigan’s credit unions are a bright spot among financial institutions in the state, despite ongoing difficulties in our economy.” – David Adams, president and CEO of the Michigan Credit Union League & Affiliates while the national growth rate for credit unions was 7.7 percent. For Michigan banks, commercial lending declined 5.7 percent through June. Nationally, commercial lending by banks declined 13.9 percent during the period. • Real estate loans by state credit unions grew 0.8 percent during the second quarter. Real estate loans by Michigan banks declined 13.3 percent and 6.8 percent at banks nationally. • Credit union savings deposits grew by 7.5 percent through the second quarter. In this category, money markets are the fastest growing accounts (up 20.7 percent), as consumers seek the
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credit union members have saved a total of $12.1 million. “Credit unions continue to Saving encouraged serve the needs of their communiAdams notes that credit unions ty and members, who will always encourage saving and responsible need business and auto loans, borrowing with programs such as mortgages and savings options,” says Adams. Save to Win, in which members “Despite chronically high unmake a $25 deposit for the chance employment in Michigan, commuto win monthly cash prizes and a nity-based credit unions continue yearly grand prize of $100,000. The program helps people save to contribute to the state’s economic recovery by strengthening money instead of spending it on their financials and adding new lottery tickets, for example. To members.” date, more than 13,500 Michigan safety and soundness and higher rates offered by credit unions.
7 of 10 will not switch to a bank, study says
Study: Credit unions lead in trust, confidence The Michigan Credit Union League has announced the results of its first statewide consumer study, showing that, relative to bank customers, almost twice as many credit union members have an outstanding relationship with their financial institution. The MCUL-commissioned study, conducted online in August, 2010 by Harris Interactive, also showed that 76 percent of credit union members are “absolutely confident” that their institution is the best place for their financial needs, while 31 percent of bank customers felt the same way. “Credit unions’ not-for-profit structure means that the institution is always working in the best interests of the members,” says David Adams, president and CEO of the Michigan Credit Union League & Affiliates. “This study shows that bank customers are moving their money to credit unions, including 15,000 people in Michigan through the first half of 2010, because of higher savings rates and lower loan rates and fees.”
for quality of service, overall value, problem resolution, transparency, trust, appreciating their business, Harris Interactive found clear differences between customer service, community involvement and doing Michigan banks and credit unions in customers’ satwhat’s best for the customer. “Consumers are looking isfaction, loyalty and willingness to recommend the for alternatives, seeing this as a good time to switch to institution: a financial institution they trust,” says Adams. “Credit • Sixty-seven percent of credit union members be- unions are dedicated to helping people lead more selieve their financial institution operates with their best cure financial lives as well as being safe, secure, federinterests in mind, compared to only 21 percent of bank ally-insured institutions.” customers. • Only 31 percent of bank customers would “defStudy methodology initely” recommend their financial institution to a The 2010 MCUL Consumer Study was conducted onfriend, family member or co-worker, compared to 64 line within Michigan by Harris Interactive between Aupercent of credit union members. gust 20, 2010 and August 30, 2010. • Seven out of ten Michigan credit union members The study included 828 Michigan residents age 18+, will “definitely not” switch their primary financial in419 of whom are bank customers and 409 of whom stitution in the next year, while only three out of ten are credit union members. No estimates of theoretical bank customers agree. sampling error can be calculated; a full methodology is • Credit union members gave their financial inavailable. stitution more positive ratings than bank customers
Results