Member Relationships Deepen As Credit Union Membership Increases

More Americans are turning to credit unions and their member-focused, non-profit financial model.

 
 

In 2018, credit union membership increased by 4.9 million people to reach 117.6 million at year-end 2018. That’s an annual growth rate of 4.4% — 27 basis points faster than year-end 2017. Membership growth has steadily accelerated since 2010 as an increasing number of people turn to credit unions for their member-focused, non-profit financial model.

But credit unions aren’t only adding members at a faster pace; they’re deepening those member relationships. The average member relationship — the average value of loans (excluding member business loans) and deposits an individual member holds with the credit union — increased 3.0% annually from $18,312 to $18,853 as of Dec. 31, 2018.

Credit unions reported year-end gains in loan as well as share balances per member. Average loans per member increased 4.3% from $8,101 as of Dec. 31, 2017, to $8,452 one year later. The average share balance per member hit $10,402, a 0.7% annual increase.

Share draft penetration jumped 59 basis points annually to 57.8%, indicating that more than half of all credit union members had chosen a credit union as their primary financial institution by year-end 2018. More than one in every five members, a full 21.2%, held an auto loan with their credit union as of the fourth quarter of 2018. Similarly, credit card penetration increased 11 basis points through the year to 17.6%.

The national share of revolving loans, primarily credit cards, nearly doubled at U.S. credit unions in the past 10 years — increasing from 3.3% in 2008 to a new high of 6.0% in 2018. First mortgage market share also nearly doubled in that time. It’s up 3.8 percentage points to 8.5% in 2018. Auto lending market share reached a high of 20.5% in 2018. The increase in market share across several loan products is evidence that credit unions are strongly prioritizing member relationships.

LEADERS IN 12-MONTH MEMBERSHIP GROWTH

FOR U.S. CREDIT UNIONS >$100 MILLION IN ASSETS | DATA AS OF 12.31.18
© Callahan & Associates | CreditUnions.com
Rank Credit Union State 12-Month Growth Members Total Assets
1 NUVISION* CA 93.20% 178,082 $2,296,606,008
2 NEW DIMENSIONS* ME 83.21% 16,293 $160,090,993
3 PFCU* MI 69.70% 50,219 $533,428,290
4 BLUEOX* MI 58.20% 23,389 $173,046,159
5 COMMUNITY 1ST* WA 55.82% 13,315 $144,682,637
6 HERCULES FIRST* UT 48.75% 8,055 $102,869,265
7 ISLAND* NY 47.43% 56,159 $1,562,047,602
8 MEMBERS PLUS* MA 43.29% 13,763 $305,910,962
9 VALLEYSTAR* VA 40.95% 43,184 $400,492,377
10 FIRST COMMUNITY* ND 35.28% 43,990 $825,691,349
* Merged in the past year.

Case Study: Keep It Simple To Engage Members

CU QUICK FACTS

Town & Country Credit Union
Data as of 12.31.18

HQ: Minot, ND
ASSETS: $439.3M
MEMBERS: 20,227
BRANCHES: 11
12-MO SHARE GROWTH: 6.4%
12-MO LOAN GROWTH: 14.8%
ROA: 0.78%

Town & Country Credit Union ($439.3M, Minot, ND) embarked on a sweeping new strategy in 2018, casting aside traditional marketing channels and complicated products and processes in favor of aggressive pricing changes, direct community engagement, and social media use.

That broad effort includes providing some of the highest savings and lowest loan rates in the credit union’s market, simplifying the product list, eliminating nearly two dozen fees, improving the website, and deepening local engagement.

TCCU now focuses on frequently posting to social media and participating in civic engagement aimed at boosting word-of-mouth around its service area. Its spend on TV, radio, and billboards dropped $150,000 from 2017 to 2018.

“Simplifying our products, services, and processes provides a better member experience,” says president and CEO Jeremiah Kossen. “We’re also saving members money by charging fewer fees and providing better loan and deposit rates.”

The credit union eliminated 22 different fees while raising ATM daily cash limits to $1,000 and the debit POS limit to $2,000 from $200 and $250, respectively. It also added instant issue debit cards to five of 11 branches and removed its annual credit card fee, lowered rates, and added a new cash-back reward.

To gauge the effectiveness of its new strategy, TCCU is relying heavily on member e-surveys that dig into member service, member value, and whether members would refer the credit union to a friend.

“We consider that to be their satisfaction level,” says senior vice president of marketing Shannon Webster. “Currently, 97% of our members would refer us to their friends and family. We’re proud of that number.”

TCCU’s new engagement efforts are also showing results in its metrics.

The credit union’s average member relationship in the fourth quarter of 2018 was $25,309, compared with $22,853 for North Dakota credit unions and $18,853 for all credit unions nationwide. Year-over-year member growth was 7.66% in the fourth quarter, compared with 4.30% for all North Dakota credit unions and 4.84% for all credit unions nationwide.

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How Does Your Membership Growth Compare?

Credit union membership reached 117.6 million members at the end of 2018. How does your membership growth compare to peers? Find out today.

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May 6, 2019


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