MINNEAPOLIS (10/27/09)--A Twin Cities Business
article recently explored Minnesota credit unions’ willingness to lend and serve their members despite a tight economy. The article, “Extra Credit,” also included comments from Minnesota credit unions CEOs; Mark Cummins, president/CEO of the Minnesota Credit Union Network; and Mike Schenk, Credit Union National Association senior economist. The overall tone of the article focused on credit unions’ willingness to lend to small businesses and consumers who have been turned away by other financial institutions. “We get a lot of members who say they’re being shut out for business loans,” Jeff Schwalen, Hiway FCU president/CEO, told the magazine. “They may be too small for many banks, or maybe they don’t qualify. We’ll take a look, and for the most part, we’re able to do the loan, assuming they can meet our requirements.” Cummins told the magazine that the state’s credit unions are experiencing deposit growth and continuing loan activity. Credit unions also remain at near-record levels for capital ratios, added Schenk. Credit unions in Minnesota have experienced a drop in net income--to $16.4 million last year from $80.2 million in 2007--because of the housing collapse. However, credit unions’ lending increased by 1.65% in 2008, and total shares and deposits surged 6.85% to $12.2 billion, the magazine said. “We’re not immune to what’s happening in the economy, but in a relative sense, we’re doing very well,” Cummins added. The “really surprising thing to me is, given the heightened correction in housing in the Twin Cities, is that both banks and credit unions seem to be doing pretty well there,” Schenk said. Other statistics the article noted include:
* Real estate loans--mortgage and equity lending--made up 57% of Minnesota credit unions’ total lending of $9.96 billion in 2008; * Credit unions showed an annualized write-off rate on all loans of 0.94%, compared with rates of 1.11% for all U.S. credit unions and 1.94% for banks; * Credit unions had a write-off rate of 1.63% compared with 4.88% of U.S. banks; and * Credit unions’ capital ratio was 10.2% as of March. Seven percent is considered “well-capitalized” by the state.