Credit unions have their best year ever – a few years ago

Credit union

Credit unions are member-owned and therefore more trusted by some. Image: Svadilfari/Flickr/CC BY-ND

Statistics show that 2011 saw a record number of people enrolling in credit unions. Consumers continued to leave traditional banks in reaction to unending fees, and out of a continued mistrust of those institutions following the economic downturn.

A record 91.8 million members

The ranks of the nation’s credit unions swelled as another 1.3 members joined their ranks in the last year, according to figures presented by the National Credit Union Administration. The NCUA collected  the data from 7,094 federally insured
credit unions across the nation. A record 91.8 million people now bank with the member-owned institutions.

Bank transfer day

Bank Transfer Day was on Nov. 5, accounted for a great deal of the traffic. Following Bank of America’s announcement that it would be charging debit card fees, thousands of consumers, already angered at what they viewed as unfair and excessive fee schedules from large lenders, moved their accounts to credit unions and community banks. Generally, local institutions and credit unions offer better lending rates and lesser fees than their giant corporate counterparts.

‘Too little, too late’

Bank of America, responding to the backlash, decided not to go ahead with the new fees. But a significant number of consumers cried “too little, too late,” and decided to stay away.

Final quarter saw the biggest push

The final quarter of the year saw 398,000 new credit union customers, or about 30 percent of new enrollments for the year. Contrast that to the 251,000 new members enrolled in the last quarter of 2010.

Assets of the nation’s credit unions have risen by 5 percent as enrollment has increased. At the end of 2010, the nation’s credit unions had assets of $914.4 billion. At the end of 2011, that figure had grown to $961.8 billion. Of those new assets, $10.6 billion was gained in the final quarter of the year alone. Net income for the industry  went up by 40 percent, to $6.4 billion.

Credit union lending went up by 1.2 percent during 2011. Loans for the year totaled $571.5 billion. The fourth quarter accounted for two-thirds of that growth.

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Growth to continue, experts say

Jay Johnson, executive vice president for the financial consulting firm Callahan & Associates, said:

“Credit unions had an exemplary year; they had a fantastic fourth quarter. More importantly, they’ve set the pace for an even better 2012.”

NCUA Board Chairman Debbie Matz optimistically sees the industry as now past the economic downturn:

“In the last quarter of 2011, the credit union industry grew to record levels in total assets and members. Combined with a year-over-year jump in industry net income of more than 40 percent, it appears that  credit unions have turned a corner and begun to put the most severe economic crisis in three generations behind them.”

So how are credit unions doing today? Things have mostly leveled out, but the less big banks pay in interest and the more they charge to bank with them will continue to push more consumers to credit unions. The question isn’t how credit unions are doing today, but how will they be doing in a few years? Some say credit unions will become more like banks and care less about the customers, others say credit unions will eventually die competing with big banks. Both these points have been argued in both directions. What do you think the fate of credit unions is?


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