SAN FRANCISCO (9/2/14)--The San Francisco Business Times last week heralded the strength of California's Bay Area credit unions in an article that highlighted the national 100 million membership milestone.
"In the banking world, 100 million isn't a big number," the article's lead paragraph read. "After all, $100 million will pay a year's compensation for a handful of big-name CEOs. But 100 million is plenty big for credit unions. Membership nationally crossed the 100 million-member mark in June for the first time ever, according to the Credit Union National Association. Bay Area credit unions are tapping into this surge, adding loan products and services as well as expanding their branch networks."
The article included CUNA statistics that indicate credit union membership rose 2.9% over the past year as 1.7 million additional members were added, marking the fastest growth since 2000.
"There is clearly growing recognition about credit unions among consumers," Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues, told the Times. "They understand credit unions place their interests above all else, particularly in returning financial benefits to consumer members in the form of lower rates on loans, higher returns on savings, and lower and fewer fees."
The article described how credit union growth has occurred in step with publicity surrounding bank fee hikes and account balance requirements. Those actions aren't the case at most credit unions.
Patelco CU, Pleasanton, with $4 billion in assets, recently reduced 39 different fees, a strategic decision that is expected to save members $800,000 annually. Patelco also saw loan growth of almost 18% over the first seven months of 2014, compared with less than 18% gain in 2013. The credit union's product-per-member rate is 4.04, CEO Erin Mendez told the Times.
Credit unions built their reputation on auto loans, and San Francisco FCU, with $884 million in assets, continues to build relationships with that product, President/CEO Steven Stapp told the paper. When they finance their vehicles, members often switch other accounts to the credit union, and banks have created more opportunities for the credit union to market its free checking, Stapp said.
Bay Area credit unions also offer business loans. Santa Rosa-based Redwood CU expanded into member business lending in 2005 to meet member needs because members couldn't find credit elsewhere. Now member business loans account for $221 million in the credit union's lending portfolio.