Contact: Glenn Ray, MCUL Director of Public Affairs
800-262-6285 ext. 246
March 8, 2011 – Lansing, MI – Michigan credit unions added more than 37,000 members in 2010 and continued growth in deposits and small business loans. According to fourth quarter 2010 call report data from the National Credit Union Administration, the Michigan Credit Union League & Affiliates reports that Michigan’s 322 credit unions continued to grow as Michigan’s economy showed some signs of improvement.
“Michigan’s credit unions are growing faster than the national average, which is impressive considering the state’s loss in population,” said MCUL & Affiliates CEO David Adams. “Recent Harris Interactive research in Michigan shows credit union members are twice as likely as bank customers to trust, value and refer their financial institution to a friend or family member. In the aftermath of the recent national economic meltdown, households are looking for a financial institution they can trust to provide fair rates and low fees.”
Credit unions in Michigan continue to have the highest membership penetration rate among the ten most populous states with 44 percent of Michigan’s population belonging to a credit union. The year-end data also showed that while overall loan growth was flat at -.4 percent, credit unions continued to show strength in small business loans with an annualized growth rate of 18.8 percent in 2010.
“Small business capital is critical for Michigan’s economy,” says Adams. “Credit unions have consistently demonstrated the ability and willingness to lend to small businesses even as the economy struggles to recover.”
Credit union members continued to save more and borrow less in the fourth quarter. As overall deposits grew by 5.8 percent in 2010, the strongest category of savings growth was in checking accounts. Credit unions’ checking account balances grew 5 percent in 2010 from $4.2 billion to $4.4 billion.
“Credit unions are more likely to offer free checking and low overdraft fees than banks,” says Adams. “But, these benefits are put in jeopardy by recent federal legislation that may force banks and credit unions to charge for basic checking accounts. An amendment to the Wall Street Reform legislation will dramatically curtail fees paid by merchants to credit unions and banks for debit cards that provide merchants with a low-cost, guaranteed form of payment. If people like their free checking, they should contact their U.S. Representatives and Senators to ask them to reverse the legislation threatening to increase the cost of basic banking services.”
The 2010 data also showed that credit unions continue to post strong capital/assets ratios averaging 10.8 percent as well as loan delinquency rates that are much lower than competitors’. On a related note, due to challenges underwriting loans, credit unions have seen a buildup in liquidity with liquid capital growing from $10.1 billion to $11.7 billion over the past year.
“Credit unions have lots of money to lend and they’re strong enough to meet most lending needs of their members and small business clients,” says Adams. “Credit unions’ strength, growth and liquidity position are the rewards of prudent lending prior to the economic meltdown.”
Organized in 1934, the Michigan Credit Union League is a trade association representing 322 credit unions statewide. Based in Lansing, the MCUL offers credit unions assistance in the areas of regulatory compliance, legislative advocacy, media advocacy and operational information. For more information, visit www.mcul.org and follow us on Twitter at www.twitter.com/MICreditUnions.