Optimism Reigns for Credit Unions During Tough Times
Everybody is looking for a bright spot in this economy, and credit union leaders are no different. After seven years of tough economic times in Michigan we must now cope with the largest housing-led economic crash since the Great Depression. Under these circumstances, keeping spirits up is no easy task.
With that said, I marvel at the optimism and resilience of our Michigan credit union community. More often than not, when I ask credit union leaders how things are going my question is met with positive and upbeat responses. Credit unions seem to keep tough economic times in perspective. We could be in the auto industry or the banking industry, or worse yet trying to balance a state or federal budget. Times are relatively good in the credit union sector.
The surge in fourth-quarter deposits and loans for Michigan’s 10 largest credit unions only adds to the feeling of hope and relevance in the credit union industry. These credit unions posted an annualized fourth quarter growth in shares and deposits of 16.9 percent with DFCU Financial, United Federal Credit Union and Lake Michigan Credit Union leading the pack with 36 percent, 29 percent and 27 percent, respectively.
On the lending side, these ten largest Michigan credit unions grew total loans by an average of 5.9 percent, annualized, during the fourth quarter. Lake Michigan Credit Union led the way with 18.3 percent followed by MSU Federal Credit Union with 9.2 percent. These are not bad numbers for an already struggling state economy slammed by a national economic crisis.
The “Invest in America” program, created by the Michigan credit union community for the benefit of the entire U.S. credit union movement, generated more good news for our economy. During the first month of the nationwide campaign GM and Chrysler posted a whopping 25,000 auto sales through the credit union member discount program. Over 1,000 credit unions and 40 state associations began promoting the campaign, including Virginia-based Navy Federal Credit Union, the nation’s largest credit union at $37 billion in assets. GM research data showed that at least 15 percent of buyers were new credit union members and over 60 percent of buyers were buying GM products for the first time. Over 90 percent of these purchases were financed with credit union loans, and credit unions’ market share of the financing for these sales continued to climb to well above 20 percent.
There is still plenty of bad news to go around. Delinquency rates and charge-offs are generally up; earnings are squeezed and costs incurred through NCUA’s corporate stabilization plan have come at a particularly bad time. But just as the Michigan winter shows signs of giving way to golf season, so too should spirits rise as the credit union movement seizes opportunities to use our charter to boost domestic auto sales, give hope to struggling homeowners and capture market share from a struggling banking industry.
Credit unions are a bright spot right now. My spirits are lifted by knowing that credit unions are doing so many good things during this very tough economy.
Michigan Credit Union League