SAN LUIS OBISPO, Calif. (11/12/08)--Credit unions on California’s central coast are weathering an economic downturn in the area caused by a depressed housing market, troubled credit markets and mounting job losses. However, credit union presidents in the area said that avoiding risky loans such as subprime mortgages and adhering to conservative management practices have prepared credit unions to stay in good financial shape during the tough times (San Luis Obispo Tribune Nov. 8). While three of four credit unions surveyed in the area had net income declines year-to-date, credit unions serving San Luis Obispo County continue to experience strong deposit growth and remain well-capitalized--which prepares them for tough times, the newspaper said. Weaknesses in the broader economy have affected credit unions, Daniel Penrod, analyst for the California and Nevada Credit Union Leagues, told the paper. Even though credit unions did not offer risky loans, members may have gone elsewhere to obtain them, he added. In its 2008-2009 forecast, the Credit Union National Association (CUNA) predicted that credit quality would deteriorate this year because declining home prices and the mortgage credit crisis flowed over into the auto, credit card, student and business lending sectors, the paper said. CUNA also predicted an increase in delinquency rates to 1.08% from 0.93% in 2007, the article said. However, despite the U.S. economic slowdown, credit unions remain stable overall and should experience savings growth and loan growth this year and next year, CUNA said.