[copperpress-advertserve-ad-reload zone="3"]
ARCHIVED  October 8, 1999

Credit unions benefit from economic boom

Credit unions across the Front Range are reaping benefits from the region’s strong job market and booming economy.

The Credit Union National Association is beginning a new public relations campaign with the slogan, “America’s Credit Unions: Where people are worth more than money.” And people on the Front Range are listening.

According to The Northern Colorado Business Report’s list of Largest Credit Unions, all but one increased their total shares and deposits over the past year. Norlarco remains the largest credit union in Northern Colorado, and Norlarco vice president for marketing and business development, Kathryn Stubler, credits the influx of new industries and well-paying jobs for the institution’s strong growth.

“People are working and tending to save some of that money,” Stubler said. “Credit unions were formed to do consumer saving and lending, and that is still our specialty and strength.”

While consumer saving is on the rise, so have first- and second-mortgage loans grown in popularity. A recent CUNA press release noted a 1.1 percent increase in June of outstanding loans from credit unions, largely attributable to a recent 5.6 percent jump in fixed-rate first-mortgage loans. Current tax laws allowing deductions for homeowners present opportunities for leveraging those assets for other purchases, Stubler said.

“As more people are getting educated about their finances, they’re understanding better how to use their homes to the best tax advantage,” she said.

Additionally, with the increasing value of real estate in the region, Stubler finds that people have more value in their homes that they can tap for other uses, such as car loans, college education and debt restructuring.

Consumers in the region also are attracted to local ownership and the personal service that credit unions provide. Jane Willard, vice president for governmental affairs for the Colorado Credit Union League, said that many unions are participating in “shared service networks,” whereby customers can conduct transactions at credit unions other than their own.

“It’s efficient for credit unions not to need to build additional branches,” Willard said. “It’s an advantage credit unions have over banks to be a part of a cooperative network.”

Credit unions are striving to enhance their use of current technology, such as Internet banking and Web development. “We’re looking at using the latest in technology to augment local, personal service,” Willard said.

Increased consciousness about and access to credit unions, particularly for small businesses and consumers in disadvantaged areas, also may contribute to rises in credit union memberships. The Credit Union Membership Access Act was signed into law last August and implementation began this past January. CUNA reported that the bill will ensure access to federal credit unions for millions of Americans, and the National Credit Unions Administration reported a 14 percent increase in new credit union membership during the first half of 1999.

Locally, some credit unions anticipate profiting from the bill in terms of new membership. Jo Butler, marketing specialist with the Wyoming Employees Credit Union, has noticed already an increase in small businesses taking advantage of these new opportunities.

“Before [implementation of the bill], the market had been stalemated,” she said. “Small businesses that would not have been able to start their own credit unions now may join others more easily.”

Wyoming Employees rose in ranking from sixth-largest last year to fifth place this year. While mortgage lending is a strong product area for Wyoming Employees, Butler feels that their efforts to recruit new members, specifically small businesses, are key.

“We keep our recruitment local and people are joining. People are investing more and we’re getting more of a share of that,” she said.

While the impact of the new legislation may take years to realize, the heightened consciousness around the bill’s origins may also be a benefit to credit unions. Bill Hampel, chief economist for CUNA, said that press coverage of conflicts between the credit union and banking industries focused attention on the lower rates credit unions offer.

“The press coverage … raised awareness about the attractiveness of credit unions. So even though [the bill] hasn’t added numbers, it has increased awareness,” he said.

Sustainability of growth remains a concern despite the strong economy. Statistics released by National Credit Unions Administration suggest increased savings in credit unions nationally with total savings increasing by 4.9 percent and investments growing by 6.8 percent during the first half of 1999. Hampel suggested that the primary risk to continued growth would be a decrease in consumer confidence, either through a slowing of the economy or a significant correction in the stock market.

Along the Front Range, credit unions are guardedly optimistic. For Norlarco, the anticipated continuation of new job growth in the Northern Colorado region means plenty of consumers to go around.

“The Front Range will continue to attract new employers, driving up population and the quality of the job base,” Stubler said.

And credit unions’ high focus on customer service vs. profit should continue to attract new members. Butler anticipates that Wyoming Employees’ growth will focus more on small business.

“Small businesses are the future trend. We aren’t looking for the business accounts, we’re looking for the personal accounts,” she said.

According to The Business Report’s list, the only credit union in the region experiencing a slight dip in their shares and deposits (approximately $200,000) was the Shyann Credit Union, although it maintained its previous ranking. Diane Atwood, president of Shyann, didn’t feel that the decrease reflected any negative trend for the credit union.

“We have a very small membership base, and that hasn’t changed. We actually like it that way, she said.”

Despite the NCUA data, Atwood doesn’t see any changes in member savings or loan activity and feels that their numbers have been steady and consistent.

Other regional credit unions fluctuated in their rankings, primarily those ranked 14th to 19th. However, all unions showed increases in their shares and deposits of between $1 million and $5 million dollars. The top five credit unions experienced the greatest gains with Norlarco topping out the increases at over $23 million and Wyoming Employees moving into 5th place with an $11.2 million dollar increase.

Credit unions across the Front Range are reaping benefits from the region’s strong job market and booming economy.

The Credit Union National Association is beginning a new public relations campaign with the slogan, “America’s Credit Unions: Where people are worth more than money.” And people on the Front Range are listening.

According to The Northern Colorado Business Report’s list of Largest Credit Unions, all but one increased their total shares and deposits over the past year. Norlarco remains the largest credit union in Northern Colorado, and Norlarco vice president for marketing and business development, Kathryn Stubler, credits the influx of new industries…

[copperpress-advertserve-ad-reload zone="3"]

Related Content

[copperpress-advertserve-ad-interstitial zone="30"]