LANSING, Mich. (3/8/12)--Michigan's credit unions increased their member business loans (MBLs) by 21.7% in 2011, according to the Michigan Credit Union League (MCUL) and Affiliates in announcing year-end performance results.
The state rate of MBL growth is more than three times the annual increase for all credit unions, said the league. The increased support of Michigan's small business from credit unions comes at a time when bank lending has remained sluggish, since 2008. The league cited statistics from the Federal Deposit Insurance Corp. (FDIC) , reporting that U.S. banks' small business lending continued to decline in fourth quarter 2011, with a year-over-year bank decline of 4.3%.
"Credit unions continue to step up and support both small businesses and local families, as other institutions are stepping back," said league CEO David Adams. "Michigan still has a long way to go to recover from the recession, but our credit unions are demonstrating that they can be counted on to support local economic growth and development as we begin to turn the corner."
The Credit Union National Association and credit unions are urging Congress to raise credit unions' MBL cap to 27.5% of assets from 12/25%. Doing so would help inject $13 billion into the economy and translate into 140,000 new jobs without cost to the taxpayer.
Michigan credit unions saw strong growth in several areas, according to new data. Their total assets rose to an all-time high of $41.9 billion on Dec. 31, up $383 million for fourth quarter and $1.9 billion for the year, said the league. Overall deposits rose 4.8% in 2011, growing faster than lending. The industry's loan-to-share ratio declined to 64.33% from 2010's ratio of 67.26%.
Loans in the state totaled $23.2 billion by year-end, an annual growth rate of 0.2% over 2010 and recouping a decrease in total loans from the first quarter of 2011. During fourth quarter, consumer lending increased by $130 million for first home mortgages, $55 million for unsecured gift cards and $100 million for used cars, said the league.
New bankruptcy filings dropped 24.3% during the year, with the state's credit unions reporting 13,613 members filing for bankruptcy. Loan charge-offs due to bankruptcy dropped to 29.19% from 31.22% in 2010--a 6.5% improvement.
"In the wake of significant growth in several key areas last year, Michigan credit unions began 2012 in a very strong position," Adams said. "Credit union savings and lending are growing at healthy rates, and are showing some of the strongest results in several quarters."
Credit union membership rose to 4.47 million as of Dec. 31, with Michigan credit unions adding 24,751 new memberships and 87,209 new checking accounts in fourth quarter. It was the strongest fourth quarter growth in several years, despite the state's declining population, the league said. For 2011, the state's credit unions added 87,209 new checking accounts.
"Our membership growth shows that more families across our state and all over the nation are embracing what credit unions offer in the way of great rates and lower fees as they continue to look for ways to stretch every dollar," Adams said.