LANSING, Mich. (12/11/12)--Credit unions are increasingly becoming the financial service providers of choice for Michigan consumers, according to an analysis of third-quarter data by the Michigan Credit Union League & Affiliates (MCUL).
Michigan has 4.53 million credit union members, a 1.3% increase since the end of 2011, according to the National Credit Union Administration. With 84,000 new members so far this year, Michigan credit unions are on their way to the largest annual increase in at least eight years, MCUL said.
For the 12-month period ending Sept. 30, deposits at Michigan credit unions increased by more than $2 billion or 5.6%. Credit unions now have 18.6% of the state's deposit market share, compared with 16.2% in 2009, according to an analysis of data for all Federal Deposit Insurance Corp.-insured bank branches operating in the state. That represents a significant shift of business away from banks and toward credit unions, as total deposits at credit unions over that time period are up more than $6.1 billion or 19.5%, MCUL said.
The third-quarter data also show other high points:
- Net worth at Michigan's credit unions is back up above 11%, from 10.82% one year ago;
- Return on assets is up to .97%, compared with .66% one year ago; and
- Loan delinquencies are down to 1.13% from 1.48% one year ago.
"Michigan consumers are turning to credit unions in record numbers to take advantage of the better rates, lower fees, and superior financial products and services we offer," said MCUL CEO David Adams.
"Credit unions have developed and cultivated innovative ways to reach out to build relationships with members and to help the people of the state prosper, and that's why more and more Michigan consumers trust credit unions with their hard-earned money," Adams said. "In addition to financial counseling, credit unions offer programs such as SaveUp and Save to Win, which reward members for saving their money and paying down debt. This approach is what sets credit unions apart."
Overall lending at Michigan credit unions rose by 1.4% in the third quarter, the highest increase in at least nine quarters. In particular, the third quarter of 2012 was the best quarter in three years for new-auto loans at credit unions, which rose by 2.4%. Used-auto-loan growth also was strong at 2.7%.
Michigan credit unions also are gaining auto-loan market share, according to data from Experian AutoCount, which tracks loan data registered with the Michigan Secretary of State. In the third quarter 2011, credit unions accounted for 10.4% and 35.2% of new- and used-auto loans, respectively. In the third quarter of 2012, those figures rose to 15.7% and 37.8%, respectively.
Year-to-date mortgage loans issued by Michigan credit unions are nearly double where they were this time last year, totaling $3.2 billion, as consumers continue to refinance with historically low interest rates.
Michigan credit unions' member business loans were up 4.8% in the third quarter, far ahead of the national rate of 2.3%, MCUL said.
"Credit unions could do even more to help if Congress would act on S. 2331, the Small Business Lending Enhancement Act, which would raise the current cap on how much credit unions can lend to small businesses," said Adams. "It's critical for Congress to pass this bipartisan, commonsense legislation now so our nation's small businesses can create jobs and renew our economy's vitality."
The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25% so that more loans could be made to small businesses. CUNA and credit unions say that increasing credit unions' MBL cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.