Posted by Christopher Stevenson
Today, on the Business &Tech page of Time.com, credit unions got some great press. In Bad Times for Banks Mean Boom Times for Credit Unions, Barbara Kiviat explores the surge in business that some credit unions have seen in the past month due to the economic crisis and bank failures. Kiviat provides balanced coverage, discussing loan and deposit growth while addressing the increases in delinquencies that some CUs are dealing with. Here's an excerpt:
Now that the credit crunch is rolling full-tilt into the real economy, even credit unions with the benefit of geography likely won't be able to escape the effects of recession. At the 66,000-member Unitus Community Credit Union in Portland, Oregon, loan volume is up this year in nearly every category — 32% in mortgages, 37% in student loans, 12% in credit cards — but so are delinquencies. Since the beginning of the year, late payments have increased from 0.17% to 0.40%.
Even by the standards of credit unions, which tend to have much lower delinquency rates than banks, those figures are worth bragging about, but Unitus CEO Patricia Smith still isn't standing idly by. Three weeks ago, she hired the credit union's first work-out specialist to start pouring through loan data and making pre-emptive calls to people who might need help — the sort of down-home, we-care solution credit unions sell themselves on.
Filene's George Hofheimer, quoted in the article, sums it up nicely: "... in times like these, it's just what the doctor ordered."
Note: If you've ever wondered how Madison, Wisconsin became the center for credit union organizations, check out Kiviat's complementary blog post.
