California, , (October 14, 2021) |
Local household “savings” in checking and all other combined deposit accounts across California are hitting their highest levels ever experienced at credit unions, with the total figure skyrocketing 35 percent from pre-pandemic second quarter 2019 to second quarter 2021 (see graph down below).
THE LATEST TREND
This trend represents an unprecedented two-year increase according to the latest California Credit Union Industry Snapshot report released today by the California Credit Union League (click snapshot report for data and chart-graphs).
Collectively, deposits made by 13.1 million California credit union members rose from $172 billion to $233 billion during the June 2019 to June 2021 period at 286 locally headquartered credit unions in the state — a statistically significant barometer of local banking activity.
No other two-year period in recent history has experienced such a boost in California credit union deposits by members and households to the tune of a net-positive $61 billion (35 percent growth).
WHY? A FEW REASONS…
It’s true that more California residents are choosing to bank at credit unions and become members, but that’s not the complete story.
Today’s higher-savings trend this far into an economic recovery that technically started around early summer of 2020 is likely most recently due to consumers traveling less from COVID-19 restrictions and a simultaneous decrease in other purchases because of pandemic issues, according to Dr. Robert Eyler, contract economist for the California Credit Union League. For some workers, continued uncertainty about job stability and the economy’s direction are also fueling this “savings” tendency.
Meanwhile, as workers entered the COVID-19 crisis point and came out the other side, their increased deposits have built a financial cushion as local economies and businesses navigate heavy churn, dislocation, repair and renewed hiring needs within the job market, as well as employee decisions amid the so-called “Great Resignation.”
However, recent price inflation on goods and services could erode some of these households’ savings for the time being. It remains to be seen whether higher inflation trends will normalize sooner versus later.
“If inflation remains relatively high through 2022 and interest rates on deposits begin to react to that increase, households’ savings may move toward higher interest-bearing accounts,” Eyler said. “But most economists are forecasting a moderation of inflation pressures as global supply chains and post-pandemic consumer demand settle into patterns reflecting less concerns about COVID-19 conditions.”
ALL REGIONS IN THE STATE
In California, credit union members (individual consumers), total loans, and total deposits either remained-at or reached record highs by June 30, 2021 compared to the year-ago period — 13.1 million members (consumers), $147 billion in loans, and $233 billion in deposits. View the California snapshot report (web link above) for details on first mortgages, HELOCs/home equity loans, new auto loans, used auto loans, credit card lending, and business loans, as well as checking accounts, savings accounts, money market accounts, certificates of deposit, and IRA/Keogh accounts.
Additionally, for statewide trends broken out by 10 local regions, click here: Bay Area, California, Central Coast, Central Valley, Greater Napa Valley, Northern California, Sacramento County, San Diego Region, Southern California, and Ventura County.
LOCALLY HEADQUARTERED CREDIT UNIONS
California’s 286 credit unions are headquartered in 36 counties: Alameda, Contra Costa, Del Norte, Fresno, Humboldt, Imperial, Inyo, Kern, Kings, Lassen, Los Angeles, Marin, Merced, Monterey, Napa, Orange, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Shasta, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tulare, Ventura, and Yolo
INTERVIEWS WITH CREDIT UNIONS
To interview a local credit union CEO or obtain a list of locally headquartered credit unions in California, please inquire.
Contact:
Matt Wrye
Senior Communications Manager
California Credit Union League
1-909-851-3935 or mattw@ccul.org