Credit Unions 2012 Year in Review
History will note 2012 as the International Year of the Cooperatives. Credit unions took advantage of that by reminding anyone they could about their cooperative structure, collaborative nature, member orientation and people-helping-people philosophy.
As a result, 2012 was a milestone year in terms of new members, assets, and more. As 2013 opens, more people than ever know what a credit union is and have chosen credit unions as their financial service provider.
Credit unions benefited from a range of efforts that shone spotlights on the good work they do. Their continued growth, their low or no fees and better rates, their assistance to people struggling to get businesses started in a tough economy, their push to get Congress to raise member business lending rates, and advocacy on behalf of the consumer on the interchange fees all led to a year of positive press that re-emphasized the credit union difference.
Here are a few milestones and other highlights of the year.
- Record membership joined credit unions. The phenomenal growth in membership credit unions experienced in 2011 did not end with Bank Transfer Day that year. It continued through 2012. In November, the Credit Union National Association (CUNA) counted a nearly 2.1 million growth in membership from June 2011 to June 2012--double the average growth for similar periods in the past decade. Members opened nearly 2.9 million new checking accounts (News Now Nov. 2).
- Credit union assets surpassed the $1 trillion mark. Credit unions in the U.S. reached the $1.02 trillion assets milestone in March--one of the most significant developments CUNA's surveys have reported. Assets grew 4.1% during the past year, CUNA reported in May (News Now May 4). CUNA economists reported the asset growth was a direct reflection of the fact that consumers increasing recognize and embrace the credit union difference.
- Mortgage business took off at credit unions. For the first time in history, credit unions were on track to surpass $100 billion in mortgage loan originations, said the American Credit Union Mortgage Association (News Now Dec. 17). As housing construction began to slowly improve, and mortgage rates remained low, more members originated or refinanced their mortgages at a credit union.
- Credit unions continued to top big banks on consumer satisfaction. As consumers became discontented with bank fees and lousy service, credit unions stood out in survey after survey. They were found to have the most loyal members and most satisfied member/customers, were noted as providing the most trustworthy services and the most safe and sound financial services and more. They topped big banks in surveys that received wide national press and were conducted by these independent research organizations: 2012 ath Power Ideal Banking Study, American Customer Satisfaction Index, Chicago Booth/Kellogg School Financial Trust Index, Prime Performance survey, a second Prime Performance survey on call center representatives, Tempkin Customer Service Ratings, and National Cooperative Business Association/Consumer Federation of America. CUNA surveys also noted that credit unions outshone banks in consumers' perceptions of safety and soundness, and that credit unions were perceived by consumers as the best place to keep their savings and checking accounts.
- Credit unions worked together to provide aid in disaster recovery efforts. In true collaborative efforts, credit unions helped each other out whenever nature had the upper hand, be it wildfires in Colorado, floods in Vermont, tornados, hurricanes or superstorms. In October credit unions along the eastern U.S. seacoast were hit with a once-in-a-century superstorm. Hurricane Sandy--responsible for 125 deaths in the U.S. and 70 in the Caribbean--affected hundreds of credit unions with closures due to power outages, wind and water damage and more. Its high winds, high waters and storm surges created havoc in an 800-mile swath along the eastern U.S. seacoast, hitting credit unions in New York and New Jersey hard. Shared branches--something that banks don't have--kept credit unions working for their members. The superstorm became the second costliest storm in U.S. history, after Hurricane Katrina in 2005. The movement collected more than $140,000 to assist credit unions, their employees, volunteer directors and members.
- Credit unions and credit union organizations consolidated more. While new corporate credit unions were getting their footing after restructuring and combining services across states or regions, credit union leagues and foundations found new ways to collaborate. They, like many credit unions who merged in 2012, had learned they can offer better services by collaborating and working together, than each might offer individually. The latest announcements came from several leagues last month. The Arkansas Credit Union League, Credit Union Association of Oklahoma and the Texas Credit Union League announced they would pursue consolidation into a single regional league, the Cornerstone Credit Union League. The North Carolina Credit Union League and South Carolina League boards announced they would move to a formal process to consider consolidating. Some collaborations were unusual, with credit unions moving to acquire banks, or credit unions deciding to share back office operations to take advantage of economies of scales.
- Mobile banking took hold in credit unions. Nothing has changed credit union's interactions with members more than online banking, and just when credit unions were getting used to that, along came the smartphone. During 2012, many credit unions introduced mobile banking channels to help attract new, younger members. Those who did so are ahead of the pack. Aite research group projects that the number of U.S. consumers who will use a mobile device to access their bank account will increase to 96 million by 2016 from today's 33 million (American Banker Dec. 20). That's a compound annual growth rate of 30%.