Some credit union organizations report the number of not only branch locations is on the decline but credit unions themselves are merging or disappearing despite a sizable uptick in deposits, loans and memberships.
The National Credit Union Association (NCUA) recently reported that 58 credit union mergers occurred between July and September contributing to the 1,348 overall reduction since 2008.
Have 17% of the nation’s credit unions vanished in thin air over the five years? Yes and no says Troy Stang, President/CEO of the Northwest Credit Union Association. Stang provided Credit Unions Online with two graphics that illustrate how the number of credit union branches in its footprint have declined over the years, but locations have actually increased within the past two quarters.
“It seems we hear from as many credit unions opening branches to expand service in new areas, as we do from our credit unions who are putting more emphasis on serving consumers through online resources,” Stang explains. “The most important thing to know is that when those decisions are made, the credit unions are making them based on what members want. Through member satisfaction surveys and constant dialogue with their members, local credit unions are able to quickly respond to their members’ requests.”
“Branches and technology are both important to consumers,” he adds. “Credit unions continue to provide the best financial services choice for consumers, whether it’s in person at a branch or through safe, sophisticated technology such as online or mobile apps. Either way, those member know they’re being served by a local credit union offering them lower fees, better rates and personal service.”
Carla A. De Baldo, vice president of sales at First Commerce Credit Union ($367 million, Tallahassee, FL) says that despite technology advances, many of her members still want to do business with a friendly face.
“We have found that 95% of our new members still prefer that initial transaction, whether to open new accounts or to originate loans, taking place in our financial centers,” De Baldo says. “They love our online banking, ATM and real time services, but they still want to know there is a person that can help them when electronics are not sufficient to meet their needs.”
“All of our focus groups and surveys have shown that for our membership, customer service, location and convenience still play a huge factor in whether or not they will move their banking to us,” De Baldo adds. “Additionally, we have really focused on adding many electronic services to the list of conveniences for the member such as Real time alerts, mobile banking, person to person transfers via mobile phone and remote deposit capture which is set to be introduced to the membership in 2014.”
Adding branch locations along with new technology seems to be the key to growing relationships at First Commerce Credit Union. “As for branch growth, contrary to other institutions, we continue to add new locations, four (4) since 2010, and another office set to open in 2014.”
Deposits, Loans, Memberships--Up!
CUNA Mutual Group’s November Credit Union Trends Report demonstrates that credit unions continue to listen to what members want as profitability, memberships, lending, deposits and capital growth are on an increase.
First Commerce Credit Union experienced a 5% growth in membership, which De Baldo says has been pretty consistent over the past few years. “With the banking industry as a whole seeing much less, we are extremely pleased,” De Baldo says.
Dave Colby, CUNA Mutual’s chief economist predicts an industry annual loan growth of 6.2% in 2013 with annual gains averaging 6.5% through 2015.
The main source of loan growth for credit unions has been auto loans and first mortgages, making up approximately 96% of all loans. Although member business loans (MBL) increased, closed business loans only rose 0.9% year over year to an average of 9.3% of total loans.
Despite growth numbers Colby warns that fourth quarter is typically not as positive. “Expect a slight pullback by year-end as fourth-quarter numbers are usually weak,” Colby reported. “Despite record membership increases, loans-per-member of $6,570 is up 3.8 percent since September 2012, the strongest growth in this key measure since mid-2009.”
What is your favorite way to interact with your credit union? Through technology or in person?