Credit Unions Succeed with Cooperative Advantage

Carissa Heckathorn, Callahan & Associates

WASHINGTON, DC – In a time when other financial institutions pulled back, credit unions stepped forward to help consumers through a rough economic patch. Callahan & Associates recent 1Q 2012 quarterly Trendwatch Call, a one-hour call highlighting the industry’s recent performance numbers, spotlighted how member-focused initiatives and collaborative partnerships within the industry helped credit unions reach $1 trillion in assets.

“Credit unions use local resources under local control to invest in local economies which results in a pro-consumer approach” says Chip Filson, chairman for the financial consulting firm Callahan & Associates.  “We are not a single trillion dollar institution; the leverage comes from the 7,000 different institutions working together in cooperative areas.”

An example of a pro-consumer approach is Educators Credit Union’s Fast Lane Financing program. It saved consumers $50 million by refinancing auto, mortgage, and credit card debt.  Located in Racine, WI it set a goal to save its members more than $20 million in 2012 and are already at the $16 million mark.  It is one example of how credit unions shrink payments and reduce interest burden through various lending programs.

With programs like Educators focusing on the good of the consumer, it’s easy to see how every state added member relationships in the past quarter. Oregon is the only state to rank in both the top 10 states for first quarter actual new members and the first quarter rate of member growth. Texas placed first in net new members with a total 101,547 members. Mississippi placed first in the rate of member growth at 4.4%.   

Credit unions have grown the number of checking accounts 5% in the past 12 months, building on momentum from the past few years as credit unions focused on member value.  Share draft penetration has increased from 41% to 51% in the past 10 years. Core deposits are growing at a double-digit pace with 16% growth in share draft balances in the past year. Core deposits represent more than 68% of total shares.

Orion Credit Union’s “Home Run” program, and programs like it, has helped position credit unions as the third-largest mortgage lender with 8% of today’s market. “Home Run” allows borrowers with bad credit the opportunity to rent one of the credit unions homes for up to two years and then purchase the home when they prove they can make the payments reliably.  

“As we go into a year that there will be a bipolar discussion about the future of America, I think credit unions represent a vision that is viable and fits more closely to most peoples’ values and the way they would like to be treated and see others treated by large institutions” says Chip Filson.  Through these collaborative partnerships credit unions’ are creating a vision for America’s cooperative future.

Callahan’s Trendwatch calls are complimentary quarterly calls dedicated to credit union performance and market opportunity.  View the 1Q Trendwatch call for more details on credit unions performance for the first quarter 2012.

Callahan & Associates is a Washington, DC-based firm that delivers in-depth analysis of credit union quarterly performance through its proprietary software and financial publications. As a financial consultant, it also offers strategic planning and investment management for credit unions. Visit to learn more.

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