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Southeastern CUs add 2.2B in assets increase MBLs
BIRMINGHAM, Ala. and TALLAHASSEE, Fla. (9/21/11)--Credit unions in Alabama and Florida are beginning to see a trend: More consumers are joining a credit union, applying for loans and paying off their debt. Collectively, Alabama and Florida credit unions added $2.2 billion in assets in the second quarter of 2011, according to the League of Southeastern Credit Unions (LSCU). That breaks down to $1.18 billion in new assets in Florida and $1.09 billion in new assets in Alabama. Both states combined to welcome 28,000 new members to credit unions; 16,000 new in Alabama and 12,000 new in Florida. “Through the first six months of 2011we are seeing a trend,” said LSCU President/CEO Patrick La Pine. “Credit unions are adding members and assets while loans are beginning to show some growth. We’re seeing savings and deposits up in both states with Alabama increasing by 7%, nearly double the national credit union average and Florida by 3%, which is right at the national average.” Credit has been tight for small businesses since the economic collapse of 2007. Credit unions, despite a 12.25% of assets cap on the amount of member business loans (MBL) they can make, are seeing major growth on MBLs, LSCU said. In Alabama, member business loans are up 81%, or $182 million. That represents significant growth over the past four years. Alabama total MBLs are now over $400 million. Florida credit unions made $200 million in MBLs during the past four years, which signifies 24% growth, to more than $1 billion in total MBLs. “The arbitrary cap, which was never in place until 1998, is causing some credit unions to turn away loans,” La Pine said. “It’s also preventing others from making much needed MBLs. We need Congress to pass H.R. 1418 and S. 509 so the MBL cap will be raised to 27.5%, which will help our small businesses survive and expand.” Credit unions are seeing more quality mortgage and auto loans being made. In Alabama, used-auto loans grew 15%, or $269 million, in the second quarter. That is nearly 10% higher than the national credit union average. Alabama credit unions have a total of $2 billion in outstanding used-auto loans. Florida credit unions used-auto loan growth was $30 million, to bring total outstanding used auto loans to $4.4 billion. What is significant in these numbers is that delinquent loans to loans and net charge-offs are dropping, LSCU said. In Florida, credit unions have seen a 32 basis points (bp) drop in delinquent loans to loans. This is better than the national credit union average of 17 bp. Through the first six months of 2011, Florida credit unions net charge-offs are 119 bp lower. In Alabama, delinquent loans to loans have dropped 24 bp, while net charge-offs have declined by 26 bp. “It’s hard to say we’ve turned the corner, but our credit unions are seeing more quality loans,” said La Pine. “Alabama credit unions are below the national credit union average in delinquent loans to loans and net charge-offs, while Florida credit unions have seen their most significant drop in years, especially in net charge-offs. These two factors give us some hope.”


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