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Ohio CU biz loan originations up 16
COLUMBUS, Ohio (10/19/11)--Demand for small business lending in Ohio remains strong, with Ohio credit unions responding with $63.3 million in member business lending (MBL) originations in the first half of 2011. Thats up 16.6% from $54.3 million in the first six months of 2010, said the Ohio Credit Union League. Of Ohios 382 credit unions, 101 reported outstanding business loan balances, totaling $406.4 million statewide, according to the Ohio Credit Union Quarterly Performance Summary. Small businesses are the economic engines that drive the economy forward, and Ohio credit unions are providing the financial support necessary for growth, said Paul Mercer, league president. We can do more. Congress is considering a measure that will provide credit unions with the capacity to lend more to small businesses, injecting $13 billion into the economy and creating 146,000 jobs nationally, without costing taxpayers a dime. H.R. 1418, the Small Business Lending Enhancement Act, would increase the MBL authority of credit unions to 27.5% of assets from 12.25%. The bill has garnered bipartisan support from Ohios congressional delegation, including co-sponsorships from U.S. Reps. Marcy Kaptur (D-Toledo), Steve LaTourette (R-Bainbridge Township), Tim Ryan, (D-Niles), Steve Stivers (R-Columbus), and Betty Sutton (D-Copley). Similar legislation (S 509), co-sponsored by U.S. Sen. Sherrod Brown (D-Ohio), is under consideration in the Senate. Jeff York, president/CEO of CoastHills FCU, Lompoc, Calif., testified on behalf of the Credit Union National Association (CUNA) last week about the benefits of a higher MBL cap before the House Financial Services subcommittee on financial institutions and consumer credit (News Now Oct. 13). Ohio credit union loan-origination growth outpaced the national average, increasing 16.2% to $2.6 billion. Ohio credit unions originated $611.4 million in first mortgages in the first six months of 2011, up 13.3% from the same period in 2010. The originations helped first mortgages outstanding grow 5.7% to $4.2 billion at Ohio credit unions. Although vehicle sales are increasing 12.8% nationally from June 2010, this has not translated to tremendous growth in the credit union auto portfolio due to heightened competition from captives, the league said. However, the states credit unions reported above-average auto loan growth, compared with the declines experienced nationally. Auto loan balances rose by 3.5% over second quarter 2010. Similar to national trends, growth was reported exclusively in the used-auto loan portfolio. Used-auto loan balances in Ohio increased 7% from June 2010 to June 2011, as new-auto loan balances fell 2.4%. Asset quality in Ohio remains strong, with the delinquency rate falling to 1.20% in June 2011 from 1.29% a year ago. Delinquency remains well below the credit union national average of 1.59%. Also, credit card delinquencies declined 40 basis points the past 12 months to 1.24%. Credit unions in Ohio added 19,000 new members the past 12 months, growing membership by 0.70% to 2.68 million members. The growth rate is faster than the national average of 0.59%. The second quarter statistics mark the 10th consecutive quarter in which Ohio has seen membership growth, following years of relatively flat growth. Total revenue for Ohio credit unions fell 2.5% to $572.2 million through the first half of 2011. Similarly, credit unions nationwide saw income levels declining over the past year. The Quarterly Performance Summary attributes declining revenue to the historically low interest-rate environment. Ohio credit union loan interest income fell 3.5% from June 2010 levels. CUNA and credit unions are urging Congress to increase credit unions MBL cap because doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create about 140,000 new jobs, with no cost to taxpayers, CUNA said.


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