Ukrainian Credit Unions Carve Community Role

Credit unions catering to Ukrainian Americans are finding their footing in lending while reducing delinquency.

 
 

More than 101,000 Ukranian-American families are members of a credit union, primarily in New York, New Jersey, Pennsylvania, Michigan, Ohio, and Illinois, where assets have topped $2.5 billion, according to the Ukrainian National Credit Union Association.

Some Ukrainian credit unions like Self-Reliance New York Federal Credit Union ($858.1M, New York, NY) reported healthy loan growth and reduced delinquency in the first quarter of 2012, according to Callahan & Associates’ Peer-to-Peer data. Many are reporting increased assets and mortgages as well as growing net income.

Ukrainian immigration to the U.S. surged in the early 1990s with the fall of the Soviet Union. Since then, credit unions catering specifically to the Ukrainian American population have promoted their ability to communicate with Ukrainian speakers in their own language. They’ve underscored their sense of community and cultural ties to their membership. But now, those credit unions are developing strategies to try to reach a younger Ukrainian American population.

“We have to convince our potential new members and our younger members that this not their parents’ credit union,” Bohdan Kurczak, president and CEO of Self-Reliance New York FCU, said at a recent UNCUA conference in Washington D.C. “We can provide virtually any financial service that your bank can and, we can do it in your native language.”

Self-Reliance New York FCU reported a 9.6% total loan growth year-over-year  – from $526.0 million in the first quarter of 2011 to $576.6 million as of March 31. Total YTD loans made in the first quarter were $29.8 million, up about 23% from the same quarter last year.

Self-Reliance New York FCU Total Loans
Data as of March 31, 2012
Callahan & Associates' Self-Reliance New York
Source: Callahan & Associates' Peer-to-Peer Software.

The nation’s 7,165 credit unions welcomed their best first quarter ever for loan originations this year. Credit Unions originated $72.5 billion as of March 31, a 25% increase from the same time last year. Ukrainian credit unions are mirroring nationwide trends in some areas, but many are still struggling with their 12-month loan growth, but they are making strides in other areas. 

For example, while Ukrainian Future Credit Union ($83.5M, Warren, MI) reported 12-month loan growth slipping 8.4% to $43.1 million in the first quarter from $47.0 million a year prior, it reported a sharp decline in delinquency. It’s total delinquent loans declined from $3.7 million as of March 2011 to $879.7 thousand this year, a 76.2% drop.

For all U.S. credit unions, delinquency decreased 16 basis points from December to 1.45% in the first quarter. With a significant drop in delinquent loans, the coverage ratio (Allowance for Loan Losses/Delinquent Loans) increased to 104.9% from 96.0%.

And while Self-Reliance (NJ) Federal Credit Union ($97.3M, Clifton, NJ) reported a 2.85% drop in its total 12-month loan growth, it reported significant strides in YTD first mortgages granted, according to Callahan & Associates’ data. It offered $2.4 million in first mortgages in the first three months of this year, a 358% increase from the $572,375 it issued last year.

Ukraine is home to about 680 credit unions that together have 1.6 million members, according to the World Council of Credit Unions. They have combined assets of about $414 million (USD) and loans of about $392.5 million.