NEW YORK-If the economy rebounds in 2012 some of the last people to feel it will be CUs that are part of the National Federation of Community Development Credit Unions.
"CDFIs know the ravages of the recession have not ended for the credit unions we represent," said Executive Director Cliff Rosenthal. "Generally speaking, low-income communities are the last to recover from hard times. Although some credit unions report they are doing more loans, our credit unions have not seen a recovery in lending yet. We will reserve judgment until we see what the end looks like."
Rosenthal noted the deleveraging of American consumers has not stopped, adding recent reports have shown some indication of increased spending and increased credit card use, "but it has been pretty modest. It does not seem like things will get worse-that we will have a double-dip recession-but we are going to wait and see."
The continued low-interest-rate environment is hurting many institutions, Rosenthal declared, noting there is little good news to be found in Fed Chairman Ben Bernanke's promise to keep short-term interest rates at or near 25 basis points for two more years, which he said "casts a real pall."
In this environment, the Federation has launched a pilot program to help older adults achieve what Rosenthal termed a "modest" level of financial security with a product that will help them reduce debt and build a small emergency savings account through their credit union.
"We are working with a number of credit unions across the country on this program. We have major partnerships with the National Council on Aging. We are very excited about this program because this is a population that no one is thinking about."
The Occupy Wall Street group was camped only three blocks from the Federation's office in Manhattan. Rosenthal said representatives visited the protesters and talked to them about credit unions. The Occupy people not only were "very receptive" to the idea of credit unions, they made a deposit into a CDCU.
'Extremely Psyched'
Rosenthal said he was encouraged by reports the Occupy San Francisco movement was planning to start its own CU (
Looking ahead, Rosenthal said the Federation is "extremely psyched" about 2012 being the International Year of the Cooperative. He said the group plans to reinforce the message that "credit unions are cooperatives and they promote people-centric development and are a viable alternative to the profit-making sphere."
"We will be doing a year's worth of activity on that," he said.
In June, at the Federation's annual conference, Rosenthal told CU Journal 2010 had been a good year for the group as a number of "substantial-sized" credit unions joined the Federation, pushing its membership to an all-time high of 235 CUs. Although the Federation had not calculated its final year end numbers at press time, Rosenthal said losses due to mergers during 2011 were roughly balanced by the addition of approximately a dozen new members.
