Michigan CUs Gain Market Share, Ramp Up Lending in Q3, while Membership Reaches New High

As the economy continues to improve, credit unions are increasingly becoming the service providers of choice for Michigan consumers when it comes to all their financial needs, according to an analysis of third quarter data by the MCUL & Affiliates.

In a news release sent last week, the league said that according to the NCUA, Michigan now has 4.53 million credit union members, a 1.3% increase since the end of 2011. With 84,000 new members so far this year, Michigan credit unions are on their way to the largest annual increase in at least eight years. 

“Michigan consumers are turning to credit unions in record numbers to take advantage of the better rates, lower fees, and superior financial products and services we offer,” MCUL & Affiliates CEO David Adams said. “Consumers want to do business with a financial institution they can trust, and because credit unions put people over profit, they have earned the trust of Michiganders.”

For the 12- month period ending Sept. 30, deposits at Michigan credit unions increased by more than $2 billion, or 5.6%. According to an analysis of data for all FDIC-insured bank branches operating in the state of Michigan, credit unions now have 18.6% of the state’s deposit market share, compared to 16.2% in 2009. This represents a significant shift of business away from banks and toward credit unions, as total deposits at credit unions over this time period are up over $6.1 billion or 19.5%.

“Credit unions have developed and cultivated innovative ways to reach out to build relationships with members and to help the people of the state prosper, and that’s why more and more Michigan consumers trust credit unions with their hard-earned money,” Adams said. “In addition to financial counseling, credit unions offer programs like such as SaveUp and Save To Win, which reward members for saving their money and paying down debt. This approach is what sets credit unions apart.”

Overall lending at Michigan credit unions rose by 1.4% in the third quarter, the highest increase in at least nine quarters. In particular, the third quarter of 2012 was the best quarter in three years for new auto loans at credit unions, which rose by 2.4%. Used auto loan growth was also strong at 2.7%.

According to data from Experian AutoCount which tracks loan data registered with the Michigan Secretary of State, Michigan credit unions are also gaining market share when it comes to auto loans. The data shows that in the third quarter of 2011 credit unions accounted for 10.4% and 35.2% of new and used auto loans respectively. In the third quarter of 2012, these same figures rose to 15.7% and 37.8%, respectively.

Mortgage loans from Michigan credit unions year to date are nearly double where they were this time last year, totaling $3.2 billion, as consumers continue to refinance with historically low interest rates.

“On the whole, credit unions offer better rates and lower fees than big banks, so it’s no surprise that Michigan consumers continue to seek out credit unions for all their financial needs. Furthermore, we know that consumer credit helps drive the economy, and credit unions have never stopped providing consumers with access to the credit needed to purchase cars, buy homes, and put meals on the table,” Adams added. 

Michigan credit unions continue to be national leaders when it comes to providing small businesses with the access to capital they need. Member business loans were up 4.8% in the third quarter, far ahead of the national rate of 2.3%.

“The continued growth in member business lending underscores that credit unions are a popular choice for capital-challenged small businesses,” Adams said. “Credit unions could do even more to help if Congress would act on S. 2331, the Small Business Lending Enhancement Act, which would raise the current cap on how much credit unions can lend to small businesses. It’s critical for Congress to pass this bipartisan, common-sense legislation now so our nation’s small businesses can create jobs and renew our economy’s vitality.”

The third quarter data also shows other high points:

“Michigan credit unions continue to grow and more importantly, continue to spark Michigan’s economic comeback, by helping families save money, supporting small businesses, and creating jobs,” Adams said. “Michigan credit unions are responsive to the needs of their members and their communities, and that support has yielded continued growth both for credit unions and for our state’s economy as a whole.”

Submissions to Monitor may be emailed. Bryan Laviolette is the editor of Monitor. Contact him by email or call (800) 262-6285, ext. 233. The newsletter of the Michigan Credit Union League is published Monday mornings or Tuesday mornings when Monday is a holiday. There is no Monitor the week after Christmas and the week after the Annual Convention and Exposition. The MCUL reserves the right to edit submissions for clarity and space.
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