Q1 Report: Michigan Credit Unions Now at 5.6 Million Members, Assist Borrowers as Covid Hits State

Membership growth continued rising in Q1; credit unions offer relief services as quarter ends in “Stay Home, Stay Safe” order.

The first quarter marked the beginning of a recession that followed 128 months of economic expansion. Coupled with the emergence of COVID-19, this has caused severe economic disruption. Q1 in Michigan ended with the Governor’s “Stay Home, Stay Safe” executive order, temporarily closing schools and many businesses, dramatically reducing routine economic activity.

Despite this economic downturn towards the end of the quarter, Michigan’s member-owned, not-for-profit credit unions reported strong membership and loan growth during the first quarter and continued strong asset quality.

Michigan credit unions reported a 0.5% increase in total memberships in the first quarter of 2020, a 2.0% annualized pace. The full-year increase was 2.7%. There are now 5.6 million credit union memberships in Michigan, or approximately 56% of the state’s population. Each day, credit unions are helping more Michiganders save money and borrow responsibly.

Signs of membership growth became more evident as the COVID pandemic impacted the state. During the transition from the first quarter and into the second quarter, Michigan credit unions were taking on new memberships from those turned away from other financial institutions when trying to acquire relief services.

Loan portfolios grew 0.7% in the first quarter, a 2.8% annualized rate.

Q1 loan growth (by type):

• Small business loans: 18.7%
• First mortgages: 11.6%
• Home equity/2nd mortgages: 8.2%
• New auto: 0.7%
• Used auto: 5.0%

This growth was bolstered in the last weeks of Q1 by credit unions’ rapid response to COVID-19’s economic impact on members. MCUL expects further growth in Q2 considering 100% of credit unions polled by the League has offered loan modifications and alternatives since the beginning of the pandemic, including emergency loans, lowered rates and refinancing options, alongside other services, such as fee waivers, forbearances, skip-a-pays and assistance with Paycheck Protection Program loans.

“The rise in Michigan credit union members, as well as outstanding direct benefits are particularly important and heartening statistics to see at this time,” said MCUL CEO Dave Adams. “As we know all too well by now, the negative effect COVID-19 has had on Michigan’s economy starting in the first quarter has been significant. In historic, difficult times like these, people need financial partners they can trust, and I’m pleased to report that 56% of Michiganders now have access to the programs and services that make credit unions different.”

CUNA’s Member Benefits Report for Q1 2020 shows that Michigan credit unions contributed to a total of $441 million in direct financial benefits to Michigan’s 5.6 million members over the previous twelve months. This is equal to $81 per member or $170 million per member household.

These figures are calculated based on average savings differences between credit union and bank pricing. They result from financial benefits, such as higher CD rates and fee-free checking, as well as lower rates and fees on products like home, car and auto loans.

Find the complete Q1 2020 NCUA Call Report Data here.

You can also find more Q1 data on Michigan credit unions’ low rates and high dividends in the Q1 Member Benefits Report.