MADISON, Wis. (3/16/09)--Media nationwide are reporting on credit unions’ safety and soundness, and their willingness to lend when many financial institutions are cutting back. Some examples:
* Truliant FCU, Winston-Salem, N.C., said its “credit is flowing like nothing is wrong with the economy,” according to TV station WXII 12. The segment noted that car loans in January were up 30% from a year ago, and mortgages were up 39%. Using loans obtained at Truliant, an engaged couple refinanced a loan on one car and purchased a used car. With the money saved through favorable loan rates, the couple is paying down credit card debt and will finance a wedding and honeymoon. The wife of a preacher refinanced her church mortgage with a loan from the $1.195 billion-asset Truliant. With the savings realized, she is hiring more staff to help run the church. The credit union said it is a conservative lender that did not get involved in subprime lending or option adjustable-rate mortgages, or “put profits ahead of practicality” like many banks. To view the video, use the link (Weekly Update March 13). * In Michigan, total credit union loans grew 8.2% to $22.3 billion at year-end 2008, compared with a 4.05 % growth rate in 2007, and 5.17% in 2006. Auto loans by Michigan credit unions rose 10.72% to $5.35 billion in 2008--an increase driven in part by Invest in America, credit unions’ lending program with General Motors and Chrysler--after two years of small decreases. Credit union executives in the state said tight credit at banks and last fall’s financial meltdown resulted in consumers taking their business elsewhere. “We are seeing a transformative shift here,” said David Adams, president/CEO of the Michigan Credit Union League. “It’s a great business opportunity” (Mlive.com March 10). * First South CU, Bartlett, Tenn., earned $9.4 million is 2008, while many financial institutions were reporting losses. The credit union is earmarking $900,000 to cover possible bad loans. While two-thirds of the credit union’s loan portfolios consists of mortgages, First South will not issue mortgages to members it believes cannot repay them. The credit union has only one delinquent mortgage borrower, said Craig Esrael, CEO. The $333.2 million-asset First South started construction last month on its 14th branch (The Commercial Appeal March 5). * Credit unions are healthy and prepared to rescue the corporate credit union system, according to a story in the March 6 Central Penn Business Journal. The article provides background on the corporate credit union system, the proposed corporate stabilization plan, and how credit unions will be affected. Diana Roberts, CEO of Hershey (Pa.) FCU, said she supports the financial rescue and hopes credit unions can repair the system on their own. “It is our duty to do that,” she said. “We own the system and we’re going to come out looking a lot better if we do it ourselves” (Life is a Highway March 10).