MINNEAPOLIS and ST. PAUL, Minn. (9/24/12)--Minnesota credit unions attracted nearly 30,000 new members in the first half of 2012, and that jump in membership means they can lend more to consumers and small businesses, according to an article in the Minneapolis/St. Paul Business Journal
( Sept. 21).
The Minnesota Credit Union Network, which worked with reporter Jim Hammerand, helped provide perspective on what MnCUN President/CEO Mark Cummins termed as "pretty phenomenal" growth. The numbers are from the National Credit Union Administration's aggregate data for the first half of 2012.
The article, which also describes credit unions' growth nationwide, notes that the growth came from new members were disillusioned with banks and switched. Many were referred to the credit union by existing members.
Lending to member businesses increased by nearly 7% and overall loans by 13%. "The new members and their business will help credit unions grow their earnings and business lending," the article reported. "Business lending is capped by regulators at 12.25% of a credit union's assets. Credit unions near the cap may cull their business portfolio to issue new loans.
It reported on the loan growth and business lending experiences of three credit unions:
- Richfield-Bloomington CU, Richfield, which has sold parts of loans to other credit unions to avoid bumping the member business loan (MBL) cap;
- Spire FCU, Falcon Heights, which increased consumer checking accounts by nearly 62% and business checking accounts by 31%. The new members allowed it to increase its business loans by 55.4% to $2.26 million in the first half; and
- Affinity Plus FCU, St. Paul, whose "Ditch Your Bank" campaign netted it 7,475 new members during the last half of 2011 and 9,932 in the first half of 2012. The new members will allow Affinity Plus to expand into new markets, develop new products and expand business lending. In the article, CEO Kyle Markland said the credit union hired two business lending specialists to start building its business portfolio by the end of the year. Small business lending was always in the credit union's plans because it is an area vacated by a lot of banks. "We're willing to put the resources we need to into this area," he told the publication.
Credit unions and the Credit Union National Association (CUNA) are urging Congress to increase the 12.25% of assets MBL cap to 27.5%. Doing this would help the economy by injecting $13 billion for new small-business loans and would help generate 140,000 new jobs the first year. Doing so would not cost the taxpayers, CUNA said.
To access the full article, use the link.