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IWSJI Economy hits Arizona Centrals loan demand
NEW YORK and PHOENIX (5/15/09)--The weight of the economy on loan demand is addressed in The Wall Street Journal in an article that cites Arizona Central CU as an institution with money to lend but fewer loan applications because of the way consumers are responding to the recession. The article notes loan demand fell sharply during the end of 2008 and is still weakening in first quarter 2009. It reported 60% of U.S. banks say demand is down. The Phoenix-based credit union with nearly $400 million in assets saw loan applications plunge last fall when the credit crisis intensified, said the Journal (May 14). In September, 3,000 loans applications totaled $13.9 million--a fairly normal month, said Patty Aker, chief lending officer. Loans dropped to 2,300 applications the following month, then 1,000 applications in November and 900 in December, said the article. In February, loan applications totaled 895 for more than $4 million. Aker told the Journal that the credit union had money to lend but people were so nervous about the economy. Many had lost jobs and others were afraid that if they bought a car, GM might not be around to honor its warranty, she said. Arizona Central said vehicle loans make up more than two-thirds of its $285 million loan portfolio. Other types of consumer loans account for the rest. About 10% are small business loans.
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