RANCHO CUCAMONGA, Calif.-The positive signs the economy is showing as the second half of 2013 approaches are now being reflected in CU performance, observed CO-OP Financial Services.
Stan Hollen pointed out that the housing market and construction are coming back, and the unemployment rate is improving. "Credit unions really have had healthy membership growth," said the CO-OP president. "Bank Transfer Day kicked that off and it has continued. CO-OP credit unions have had very good year-over-year payments growth-credit cards grew by 6% and debit by 12%. On lending, CUs are beginning to gain share, thanks a great deal to auto lending-especially indirect."
Hollen observed that today there is much more CEO optimism-and no "doom and gloom. There's a lot more positive energy. Maybe we are not back to boom time, but I think we have a very positive environment."
Fighting Complacency
With ROA rising, Hollen cautioned that CUs cannot get complacent and must work lending especially hard.
"Credit unions have to be aggressive promoters of loans-they have to raise earnings as there is no other way of raising capital. Strong ROA, as we know, is essential for growth."
Hollen also reminded that pursuit of earnings includes strong expense control and that credit unions above 400 BPs expenses to assets will have a hard time growing.
