Georgia credit union members continue to improve the financial security of their savings account balances at the state's credit unions grew in 2011, indicating consumers maintained much of their financial prudence characteristic of recent years, according to a Georgia Credit Union Affiliates (GCUA) survey.
The most recent "Paying Attention" report from GCUA revealed that savings deposits among credit union members increased by 10.59%. Also, total credit union loan balances in the state grew 4.98% in 2011, down from the 11.17% growth rate in 2010.
The report, released quarterly, combines savings and lending data from 38 credit unions statewide--representing 91% of credit union assets and 84% of members in Georgia--with poll responses from more than 2,400 credit union members.
"Georgians remain cautious about the recovery, and many have not changed their views from a year ago," said Mike Mercer, GCUA president/CEO. "Still, there are positive signs. While savings growth rates are slightly below 2010 levels, Georgians continue to save their money, and the number of bankruptcy filings by credit union members have also fallen."
The report also revealed:
- Business lending grew by 13.83% last year;
- Used-car lending continued its growth at a rate of 7.67%;
- First-mortgage balances increased by 8.94%; and
- Bankruptcies filed by credit union members decreased by 15.12% in 2011.
"It's common to suggest that consumer behavior will change dramatically as a result of the Great Recession, similar to the way it did for the generation that lived through the Great Depression of the 1930s," said Bill Hampel, chief economist for the Credit Union National Association. "I think that's way overblown. We may see some modest long-term changes in behavior, but nowhere near the effects of 80 years ago, simply because as severe as it was, this latest recession was minor compared to the Great Depression.
"One medium-term effect is many households approaching retirement may need to work an extra year or two," Hampel added. "Longer term, we could see modest changes in the direction of greater saving, more conservative investing, and lower home-ownership rates."
"Another bright spot in Georgia's outlook is the financial prudence of credit union members," Mercer said. "When asked how they would use their tax refunds this year, an overwhelming majority plan to either save the money or use it to pay down debt."
According to the GCUA poll, 44.4% of Georgia credit union members intend to use tax refunds to pay down debt, and 36.1% of members plan to put the refund towards savings. While Georgians' trend of saving is not new, the recent focus on repaying debt and postponing loans could mean consumers are rebuilding their confidence and are determined to regain sound financial security, GCUA said.