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Wednesday, Jul 24, 2024

Credit Union Membership Shows Biggest Jump in 25 Years

Credit unions continue to gain converts and recently surpassed the 100 million mark in membership, according to the Credit Union National Association, the trade group representing nearly 7,000 credit unions.

For the year ended June 30, total membership in credit unions increased 2.9 percent to 100.1 million, up from about 98.4 million at June 2013, CUNA said.

The growth was the biggest jump in more than 25 years, CUNA said.

The expansion has much to do with greater satisfaction among consumers in the delivery of services, said several credit union executives.

“There is clearly a growing recognition about credit unions among consumers,” said Diana Dykstra, president of the California and Nevada Credit Union Leagues. “They understand credit unions place their interests above all else.”

The gains in membership are the result of both the natural growth in the population as well as more commercial banks customers transferring at least some of their business to a credit union, said Neville Billimoria, senior vice president of Mission Federal Credit Union, San Diego’s second largest credit union measured in assets.

“Most of the gains we’ve had are definitely coming from customers of big banks who are transferring all their business, or setting up a complementary banking relationship (such as a mortgage or auto loan) with a credit union,” Billimoria said.

At Mission Fed, membership grew 5 percent over the year to nearly 171,000 as of June.

“It’s about a lot of base hits, not any single magic bullet,” Billimoria said of the factors contributing to the increase.

In many instances, the gains have come when consumers compare the interest rates they get on loans and their deposits with what they receive from banks. They also see a difference in the fees charged by credit unions compared with those charged by banks, Billimoria said. “They’re ‘fee’d’ up.”

At San Diego County Credit Union, the area’s largest with about $6.3 billion in assets, membership as of June was 268,806, up 14 percent from the total two years earlier in June 2012.

“During the past two years, our commitment to providing breakthrough banking products that not only meet the demands of today’s busy lifestyle, but also save our members money, has been attributed to our successful growth,” said Teresa Halleck, SDCCU’s chief executive officer.

In 2011, many credit unions saw a surge of membership gains after a few national megabanks increased the fees charged for such products as debit cards. The publicity resulting from the proposed fees set off a social media campaign called Bank Transfer Day, which credit unions readily exploited.

Mike Schenk, chief economist for CUNA, said national credit union membership barely grew in 2010, rising 0.65 percent. But that changed dramatically the following year.

“With the spotlight turned in 2011 to the increasing fees banks were charging, particularly for debit cards and other products, and the additional publicity for the lower and fewer fees at credit unions by contrast, membership growth that year more than doubled over the previous year by 1.4 million.”


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