LAS VEGAS-The gloomy news in the financial sector does not mean there are no bright spots for credit unions, according to one person.
Bob Hoel, a fellow at the Filene Research Institute and its former executive director, "congratulated" credit unions for a strong average capital position of 11%, and said positives can also be found in high member satisfaction, impressive political strength that means taxation is unlikely in the foreseeable future, and an economy in flux, which Hoel said equals special growth opportunities.
"Judging by past economic downturns, this is a time for credit unions to grow loans and membership," he observed.
That same economy has stifled growth at many credit unions. Hoel offered CUs two growth methods: more members, or more business per member. "Sounds simple," he said with a laugh. "But we've all stopped growing."
Credit union membership growth over the past six decades has dropped from 10.6% in the 1950s, to 3.9% in the 1980s, to 2.5% in the 1990s, to 1.9% since 2000, he said. "In 2007, membership growth was 1.4%, and even that figure is suspect given some people are joining multiple credit unions, and others are indirect members."
Part of the problem, he told attendees of an educational session at the recent National Directors' Convention here, is consumers simply do not like switching financial institutions. "More than just new products and services are needed-there must be something special."
Hoel recommended credit unions target people who are going through big life events, such as getting married, getting "unmarried" or moving out of the house for the first time.
"Go after the 18-year-olds," he counseled. "Some credit unions worry about delinquencies with that age group, but this is where new members come from. Don't wait until they are 25."
Statistics show 59% of Americans get their financial services exclusively at a bank, while just 7% say they only do business with a CU. Hoel said the same survey found 15% mostly deal with banks, while 12% reported mostly working with credit unions.
"The total credit union percentage is 34%, but we are not getting that large a share of wallet. We are not mining our membership," he assessed.(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com/ http://www.sourcemedia.com/
