By Gina Ragusa Published June 12, 2013 Credit Unions Online
Proof that bank bailouts and rising fees have worn thin on consumer patience is evident in the latest figures recently released by the National Credit Union Administration (NCUA).
NCUA announced that first quarter growth increased at the fastest pace in five years with memberships climbing by over 800,000.
“Not only do credit unions generally offer better rates and lower fees, they have powerful appeal in today’s environment where so many people are put off by big conglomerates and are turning instead to locally based, community-oriented businesses,” said CUNA President/CEO Bill Cheney. “Credit unions, as cooperatives owned by the people they serve, embody those traits, and consumers are flocking to them in huge numbers.”
In addition to an expanding membership, delinquencies dropped to 1.02% and net charge offs decreased to 0.61%.
According to the Credit Union National Association (CUNA), The Federal Reserve's Consumer Credit Report announced that borrowing also inched up $11.1 billion, or 4.7%, to reach $2.82 trillion at the nation’s credit unions.
Individual Regions Show Collective Strength
Iowa credit unions’ asset and deposit growth proved to be the strongest in the nation, collectively growing 10.4% in assets and 10.8% in deposits.
As Iowa led the nation in asset and deposit growth, credit unions in Colorado are boasting the fourth-lowest delinquency rate for first quarter and a significant lift in member business loans.
Colorado business owner Simone Parisi said that he shopped around and procured three bids before heading to a credit union for a $200,000 line of credit. "We really took advantage of the credit-union connection," he told The Denver Post. "It was really the chance to customize and personalize the loan. It was much more personal than just turning on a computer and reading the numbers."
In Michigan, the Michigan Credit Union League announced that state-wide credit unions set a new membership record by 15,776 to a total of almost 4.6 million--the seventh straight quarter Michigan credit unions saw membership growth.
In fact, Crain’s Detroit Business said that 46% of Michigan residents are credit union members, with the national average at approximately 30%. Michigan credit unions also originated over $1 billion in mortgage loans in addition to experiencing growth in both student lending and member business loans.
Service Touch Points Support Business Drive
While fees, rates and corporate befuddlement appear to lead why consumers are leaving big banks by the bucket loads, a recent study by CFI Group found that service is another key driver to the mass exodus.
In the 2013 Credit Union Satisfaction Index (CUSI), six key customer satisfaction elements are measured such as online banking, branch staff, branch convenience, and information and communications. Across the board, credit unions scored consistently higher than other industries, including retail banking.
CFI reports that since 2007, credit union membership has grown by more than 5%. "The credit union industry has shown strong growth since the financial crisis of 2007, and the CUSI is an important tool for benchmarking and tracking its competitive differentiators," said CFI Group CEO Sheri Petras in a press release. "CFI Group is proud to have worked so closely with the industry to apply the proven ACSI methodology to evaluate current customer satisfaction, and how that satisfaction level will impact the ongoing success of its financial institutions."
Credit union officials say that it’s the “whole member” approach to financial service support that have made credit unions more desirable. "Consumers have told us they want banking services delivered in a caring, low-fee environment," McGraw-Hill Federal Credit Union ($232.3 million, East Windsor, NJ) President Shawn Gilfedder told ABC News. “Credit unions across the nation help their customers achieve financial wellness... through a caring, needs-based approach.”