Credit unions in Michigan closed out the first half of the year by continuing long-running growth trends, according to recent data from the Michigan Credit Union League and the National Credit Union Administration.
Membership statewide was up by 3.6 percent at the end of the quarter, slightly above the 3.5 percent growth rate seen in June 2017. With more than 5.3 million members across the state – more than half of Michigan’s population – credit unions delivered an estimated $396 million in direct financial benefits to members during the 12 months ended June 2018.
Loan portfolios also outperformed the previous quarter, growing by 4.6 percent – an 18.4 percent annualized pace – as opposed to the prior quarter’s 1.6 percent gain. New automobile loans and first mortgages were standout performers compared with other loans, with annualized growth of 20.8 percent and 14.4 percent, respectively. Used car loans grew by 11.7 percent and commercial lending was up by 12.5 percent, while credit cards and other unsecured loans rose more than 6 percent.
“Michigan’s credit unions are growing their memberships, and providing great value to their over 5.3 million members by lending responsibly and saving consumers and small businesses money every day with their lower loan rates and lower fees,” Michigan Credit Union League President/CEO Dave Adams said in a statement. “This responsible lending, coupled with their fee-free checking accounts and convenient shared ATM networks as well as their trusted service mantra, makes credit unions stand out against large banks that tend to over-fee their customers.”
While the state as a whole saw strong member growth at 3.6 percent, individual regions saw membership lifts significantly higher. Grand Rapids-based credit unions, in the western part of the state, saw 22.6 percent membership growth, while CUs in Lansing and Alpena grew by 11.4 percent and 13.4 percent, respectively. Detroit credit unions experienced 7.3 percent membership growth, 10 basis points below that of Marquette, on Lake Superior in Michigan’s Upper Peninsula. Muskegon-area credit unions were up by 8.5 percent while Traverse City CUs grew 5.5 percent.
Michigan’s credit union capital ratio remains above-average with 98.7 percent of the state’s credit unions receiving well capitalized net worth ratios above the 7.0 percent regulatory threshold level.
The average credit card late fee was also found to be almost $10 lower than those of Michigan banks, while average closing costs on mortgages were found to be around $200 lower at credit unions.
“In a low rate environment, and with uncertainty about the stock market, more consumers are discovering the higher yields and a safe haven with federally insured CDs at credit unions,” said Adams. “Our data shows that CD rates are higher than banks at most credit unions and this is driving good deposit growth at credit unions as well as growth in checking accounts.”
