Michigan Consumers Turning to Credit Unions for Lending Needs, Student Loans Increase 41% in Traver
LANSING, MI (March 26, 2014) – Credit Unions are a popular choice in Michigan, as nearly 80,000 consumers turned to these institutions in 2013 for lower rates on loans, fewer fees and better customer service.
For both of the last two years, an average of 215 people per day – including weekends and holidays – have joined a credit union, according to data compiled by the Michigan Credit Union League, a trade association that represents 98% of Michigan Credit Unions. In the Traverse City area, more than 225,000 people depend on Credit Unions for their financial needs. Statewide, 4.6 million people are members, about 47% of the state’s population.
Annual data for 2013 shows that loan products have been particularly attractive to consumers, and none more so in the region than student loans. As the need for private loans builds, Credit Unions are stepping up to help. Student loans were up 41% in the Traverse City area, compared to 32% statewide.
“Credit Unions are well known for the mission of helping members with all of their financial challenges, and college loans are clearly an important challenge,” said Patty Preuss, CEO of Filer Credit Union, which increased student loans 82% in 2013.
Educational support doesn’t stop at lending, though. Students also get support through scholarships estimated to be worth more than $2 million in 2013 alone, according to a survey of Credit Unions commissioned by the League and compiled in the annual Community Reinvestment Report.
Auto, home and business loans all saw increases in 2013 as well.
For instance, Credit Unions financed a record high of $4.32 billion in fixed-rate mortgages statewide in 2013, up $40 million from then-record levels in 2012, helping more consumers buy homes or refinance mortgages to take advantage of low interest rates.
“Credit Unions take pride in embracing a lending philosophy that strives to support communities and members and to keep money local, helping the local economy at a greater level than simply one vehicle or one business,” said Dave Adams, CEO of MCUL. “This philosophy, and the willingness to lend money despite a rough economic picture, is at the heart of what makes Credit Unions different from banks.”
These member-owned institutions have a strong and growing hold on indirect auto loans for used cars at 41.9% of the market statewide, a 5.3% increase over 2012. With interest rates that average 1.39% less than bank rates, a statistic that is tracked by the Credit Union National Association, consumers who seek out credit union loans generally save themselves hundreds over the life of their loans.
Business lending to members statewide has been on a steep upswing since 2007 that continued through 2013 and does not appear to be slowing down. Total business loans have increased from $446.6 million in 2007 to $1.2 billion by the end of 2013. In the Traverse City area, business loans were up nearly 16% in 2013 to more than $25 million. Credit unions have continued to support member businesses even as banks cut back their lending in recent years.
Beyond loans that help consumers manage the large purchases in life, Credit Unions also work with their members to help build their financial skills, through student branches in 253 Michigan schools; thousands of classroom financial presentations; and adult financial counseling, seminars and workshops. Other consumer support comes in the form of loans to help members break the cycle of high-cost payday loans as well as exclusive discounts offered to members for Sprint wireless services, TurboTax, ADT home security and DIRECTV services.
Savings and checking accounts also play an important role for consumers, and Credit Unions are seeing growth in these accounts as well. Since 2006, market share has increased from 14.9 percent to 19 percent.
“Credit Unions are owned by their members, which means that the institutions are committed to offering members the highest quality services at the lowest possible price,” Adams said. “We continue to work to build awareness so that more Michiganders will know and understand the difference we offer compared to big banks.”Go to main navigation