Credit unions sense recoveryPublished 6:02pm Wednesday, March 7, 2012
LANSING — Strong improvement across several key industry indicators demonstrate the state’s economy continues its turnaround, with Michigan credit unions providing solid support for local businesses and consumers, the Michigan Credit Union League said Wednesday as it announced year-end results for 2011.
“Credit unions continue to step up and support both small businesses and local families, as other institutions are stepping back,” said David Adams, CEO of the Michigan Credit Union League and Affiliates. “Michigan still has a long way to go to recover from the recession, but our credit unions are demonstrating that they can be counted on to support local economic growth and development as we begin to turn the corner.”
Newly released data shows Michigan credit unions’ total assets rose to an all-time high in 2011, reaching $41.9 billion on Dec. 31, an increase of $383 million for the quarter and $1.9 billion for the year. Overall deposits at Michigan credit unions rose by 4.8 percent in 2011. Deposits continued to grow faster than lending, and the industry’s loan-to-share ratio declined to 64.33 percent, down from 67.26 in 2010.
Total loans by year-end 2011 reached $23.2 billion, and finished the year with annual growth of 0.2 percent over 2010, recouping all the decrease in total loans occurring in the first quarter. For the quarter, consumer lending grew by $130 million for first home mortgages, $55 million for unsecured credit cards and $100 million for used cars.
Credit union member business loans increased by 21.7 percent in 2011, a rate which is more than three times higher than the annual increase for all U.S. credit unions.
The data showing increased small business support from Michigan’s credit unions comes as bank lending remains sluggish, a trend dating back to the 2008 recession. According to the FDIC, U.S. banks’ small business lending continued to decline in the fourth quarter of 2011 with a year-over-year bank decline in small business loans of 4.3 percent in 2011.
New bankruptcy filings dropped 24.3 percent in 2011, with Michigan credit unions reporting 13,613 members filing for bankruptcy.
Furthermore, the percentage of loans charged off due to bankruptcy in 2011 fell to 29.19 percent, down from 31.22 percent in 2010, representing a 6.5 percent improvement.
“In the wake of significant growth in several key areas last year, Michigan credit unions begin 2012 in a very strong position. Credit union savings and lending are growing at healthy rates and are showing some of the strongest results in several quarters. Credit union membership also rose to 4.47 million as of Dec. 31. These are all trends which demonstrate the industry’s and the state’s resilience,” Adams said.
According to MCUL’s analysis, Michigan credit unions added 24,751 new members and 87,209 new checking accounts in the fourth quarter of 2011, the strongest fourth quarter growth in at the past several years, despite continued declines in the state’s population. In all of 2011, the state’s credit unions added 87,209 new checking accounts.
“Our membership growth shows that more families across our state and all over the nation are embracing what credit unions offer in the way of great rates and lower fees and as they continue to look for ways to stretch every dollar.”
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