MADISON, Wis. (12/31/12)--U.S. credit unions have benefitted from some of the failures of larger banks and saw big growth in the past year, a Credit Union National Association (CUNA) economist told HousingWire Wednesday.
During the past year, credit unions nationwide have seen net membership gains of more than two million--up 2%, Mike Schenk, CUNA vice president of economics statistics told the publication.
The gain puts credit union membership at its highest level in 15 years during a time when banks still are contending with a loss in consumer confidence and legacy-mortgage issues, Schenk added.
"The consumer backlash against the banking industry (and especially big banks) had its roots in the housing/financial crisis as it became more obvious that many if not most of the large banks saddled consumers with grossly inappropriate mortgage loans," Schenk explained.
"The backlash intensified in 2011 when several big banks announced plans to impose excessive deposit account fees," he added.
The International London Interbank Offered Rate (LIBOR) scandal consisted of accusations that international banks manipulated rates--negatively impacting the cost of borrowing on specific types of loans, HousingWire said.
"Credit unions are not totally immune from these manipulations operationally because the manipulations can influence product pricing in the marketplace and, by extension, profitability and demand for products and services," Schenk explained. "More broadly, credit unions were not party to any manipulation.
"Subsequent reports of misdeeds (such as the LIBOR scandal) have helped to fuel the fire of anti-bank sentiment and credit unions are undoubtedly benefiting from all of these developments," he concluded.
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