Looking Forward to 2010: A Reflection on Credit Union Membership

Credit unions were the first responders during the credit and economic crisis of the past two years. Discover how success in 2009 lay the foundation for success in membership in 2010.

 
 

In the past twelve months, credit unions have redefined what it means to be a cooperative. The focus has been not on "what makes us different" but rather "the difference we make." Credit unions have reached record levels of lending and are stepping in to fill the void left by the changing economic landscape. In the coming weeks, we will take a brief look from our 2010 Credit Union Directory at the past year's success in core business segments including mortgages, autos, and performance in key financial metrics. In addition, we will share a first person interview with executives sharing their credit union's story.

A Reflection on Credit Union Industry Membership
Credit union membership grew 1.8 percent over the past twelve months, the highest rate in five years. Nearly 1.7 million net new members were added since June 2008, and the total membership for the credit union industry stands at over 91 million strong at the end of the second quarter. Strong member growth over the past year reversed the slowing growth trend since 2003.

Even with the strong member growth, penetration in the core products of checking accounts and auto loans ticked up between June 2008 and June 2009. Overall, members received over 19 million loans during the past year, and over 6.4 million new share accounts were opened. As the data proves, while many financial institutions dramatically tightened credit standards and pulled back from the market, credit unions largely operated business as usual, attracting new consumers in the process.

Credit unions were also able to capitalize on negative media coverage for banks throughout the year, and the shakeup resulting from mega-mergers between some of the largest thrifts and banks. Many have taken advantage of an opportunity to differentiate themselves using public relations outreach and advertising efforts, which were also aided by declining advertising costs in many markets. Average educational and promotional expense per net new member over the past 12 months was $276, a significant decrease from June 2008 levels of $467.

A Personal Reflection from Kevin Foster-Keddie
This year, we celebrate the industry's role as 'agents of change'. Leaders from various components took time to share their voices on key issues and trends. Washington State Employees Credit Union CEO Kevin Foster-Keddie shared his thoughts on the opportunity for credit union membership in 2010:

"I believe credit unions will continue to win market share among the U. S. population both in the short and long run. That's because credit unions have a great story to tell, and that story will become more attractive and persuasive over time. I also believe that this recent economic turmoil is having a good impact on member growth; Americans can see quality, can see safety, soundness, and service. I think individual credit unions can strengthen this trend by promoting their brands in effective ways. This includes using such mainstream media as television, radio, and the press. In this respect, Washington state has been a leader; we have been doing very well here attracting new members.

Because I am optimistic about long-term member growth, I don't think we have to worry about short-term member growth figures. There may be some dips, but we should recognize that credit unions are a mature industry and that there will be periods of slow as well as robust growth. The important thing is not to get fixated on metrics as a measure of success or failure; doing so takes your eye off the more important goal of really helping the people we already have as members.

Over the long term we should definitely be investing in the youth, immigrant and like sectors, but we should realize that our investment and troubles reaching out to new sectors will not result in quick payoffs; there will be no magic bullet bringing these people in. Rather individual credit unions will have to decide for themselves which segments to pursue and then stick with their strategy."

The Complete Credit Union Industry Story
The record level of membership is just one the stories from the past year building momentum for 2010. Credit unions were the first responders during the credit and economic crisis of the past two years. Their continuous efforts to serve members are like the ripples caused by stones thrown into a pond. Because of their example, others are creating their own ripples and soon the 'waves' of recovery will be reaching all shores.

Get the complete story of the industry's success in Callahan's 2010 Credit Union Directory. Learn more now.

 

 

 

Nov. 9, 2009


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