More than 4.5 million people are now members of Michigan credit unions, setting a new record, according to 2012 first quarter data just released by the National Credit Union Administration. Statewide, credit unions also reported record checking account balances at the end of the first quarter of 2012 aided by near-record quarterly balance growth and new checking accounts. An analysis of the data by the Michigan Credit Union League & Affiliates also shows that this was the best first quarter in 10 years for loan originations driven by heavy mortgage refinancing, continued growth in business loans and an improved lending environment for both new and used auto loans.
“Michigan consumers are not letting up in moving their money to credit unions because they recognize the credit union difference of putting Main Street families and businesses first,” said MCUL & Affiliates CEO David Adams. “The first quarter results further illustrate that 2011’s much talked about Bank Transfer Day was not an isolated event. Michigan consumers want the straightforward, no-nonsense pricing, low fees, low rates on loans and credit cards, and superior member service that credit unions provide, and are moving more of their money to credit unions every day.”
According to the NCUA’s data:
Credit unions added 30,000 new members statewide during the first quarter of 2012, surpassing the 25,000 new members added during the first quarter in 2011. Credit unions in Michigan continue to have the highest membership penetration rate among the 10 most populous states, with nearly half of Michigan’s population now belonging to a credit union. Factoring in Michigan’s continued population decline, credit union membership growth in the state is particularly noteworthy.
Credit unions saw near-record deposits in the first three months of the year, with an 11.8-percent increase in share draft balance growth– a near record quarterly growth rate, thanks to members opening 30,000 new accounts. Total deposits increased by 5.5 percent in the first quarter, outpacing all of 2010.
Michigan credit unions continue to lend when others will not. This was the best first quarter for loan origination in ten years, with strong results across several categories. The first three months of the year saw a 1.7% growth in first mortgages, which have increased steadily over the past five quarters.
Both new and used auto loans showed improvement in the first quarter of 2012, with growth in the used vehicle loan segment and narrower contraction in the new vehicle loan segment compared to this time last year. This speaks well to the continued recovery of the auto industry.
Member business lending remains strong and is up 2.6 percent in the first quarter of 2012, while purchased business loans are up 9.6 percent for a total quarterly increase of about 4.4 percent in business loans.
As evidenced from these results, credit unions are ready and willing to lend to small businesses, but an arbitrary cap threatens to limit the critical access to capital that will help our economy recover and grow. That’s why supporting legislation to raise the credit union member business lending cap from 12.25 percent to 27.5 percent of assets for well-capitalized credit unions remains the highest priority for MCUL, along with state leagues across the country and the Credit Union National Association (CUNA). S.2231, the Credit Union Small Business Jobs Bill is currently awaiting a vote in the U.S. Senate.
In a further sign that the economy is improving, the overall delinquency rate for loans at Michigan credit unions continues to drop and now approaches pre-recession rates, falling to 1.33 percent from 1.49 percent as of the end of 2011.
“While other lenders are holding back, credit unions continue to increase lending to small businesses, homeowners, auto-buyers and more, helping bring back Michigan’s economy,” Adams said. “The continued growth of credit union membership and access to capital means money stays in Michigan, goes back to credit union members and drives local economic expansion.”
At Community Financial Credit Union based in Plymouth, the upward trend is reflected in an 8-percent increase in membership and record growth in checking accounts at 7.7 percent, compared with 2011. Annually, CFCU is averaging a growth rate of 9 percent in new members and checking accounts. CFCU also continues to report double-digit increases in first-time home loans, providing 13 percent more loans this year than during the same period in 2011.
“Because Community Financial Credit Union is focused on our members, we are seeing our highest all-time member satisfaction ratings and that’s all driven by the credit union commitment to families and businesses in our community,” CFCU Chief Executive Officer Bill Lawton said. “We want to provide access to capital at a time when others are holding back.”
At Community Choice Credit Union based in Farmington Hills, member business lending has increased 100 percent compared with May 2011. As of April, Community Choice approved more than $8.1 million in business loans, with an additional $9.1 million expected to be approved in the near term. Loans to first-time homebuyers increased 239 percent and auto loans have gone up 309 percent between April 2012 and the same time in 2011.
“Many of our members have been affected by the housing crisis and Community Choice Credit Union is proud that we are seen as a trusted financial partner at a time when big banks have turned their backs on people,” said Philip Cooper, Community Choice chief operating officer. “When large corporate banks refuse to lend, that strands many of our members, from businesses in the small- and mid-size market areas, to people who are looking to save money when they need to buy a new vehicle. Our programs are all part of credit unions’ philosophy of giving big to our members.”
Co-op Services Credit Union, based in Livonia, provides innovative programs designed to help its members save even more money. For example, already low auto-loan rates can be even lower if members with checking accounts use automatic payments. As a result, auto loans have increased 30 percent during the first quarter of 2012 compared with the same quarter in 2011. Like other credit unions, Co-op Services is also seeing its membership grow, with 10.5 percent more members this quarter compared with the same time in 2011, and a 17.2 percent increase in checking accounts.
“Co-op Services Credit Union belongs to our members, and that means everything we do focuses on helping them achieve their financial objectives,” Co-op Services CEO Tony Carnarvon said. “Our programs put more money back into the pockets of our members. That’s money that supports our community and drives our local economy, and CSCU is committed to being a part of this effort.”
About the Michigan Credit Union League & Affiliates
Organized in 1934, the Michigan Credit Union League is a trade association representing 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 Facebook at www.facebook.com/MICreditUnions and on Twitter at www.twitter.com/MICreditUnions.