SAN DIEGO (4/9/12)--More Californians are counting on services from credit unions, according to a San Diego Business Journal (March 26) report about membership growth in the state.
Overall membership in the state swelled last year to about 9.7 million, an increase of 2% or 215,000 members, said the California Credit Union League in the article, "More Members Bank on Credit Unions' Services."
During fourth quarter, the state's credit unions added nearly 167,000 new members, but on a net basis the number was closer to 77,000, after counting attrition, said Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues.
Many of the gains occurred in late September/early October and involved moving accounts from the "Big Five"--Chase Bank, Bank of America, Citibank, Wells Fargo Bank and U.S. Bank--after large banks decided to charge customers for using their debit cards, Dykstra told the Journal.
The article noted that San Diego-based California Coast CU attracted about 11,000 new members during 2011, a 57% increase over 2010 membership gains. Its CEO, Marla Shepard, told the Journal that the growth was the result of growing dissatisfaction with bigger banks. About 75% of the new members opened a checking account and got debit cards, while 24% opened a loan.
The newspaper also noted that the league and credit unions are supporting legislation to increase credit unions' member business lending (MBL) cap to 27.5% of assets from the current 12.25%.
Shepard said her credit union is prevented from making new small-business loans because it has already reached its MBL cap--about $230 million. She noted that banks have cut back considerably on small business lending the past several years and said credit unions should be given the ability to extend MBLs because there is a real need for the loans.
The Credit Union National Association (CUNA) estimates that increasing the MBL cap would mean $13 billion would be available for investing in new small business loans. That, in turn, would help create 140,000 jobs the first year, without costing taxpayers a dime, said CUNA. The U.S. Senate is expected to vote on a bill to increase the cap sometime after the congressional recess.