Virginia's Credit Unions Add Half-Million Members in 15 Months

LYNCHBURG, VA (07/14/2010)(readMedia)-- Virginia's not-for-profit, member-owned credit unions are adding members at a record pace, while helping rebuild the state's economy by sharply increasing their lending to members with small businesses, according to data from credit unions' federal regulator.

Virginia's 191 credit unions added almost a half-million new members between December 2008 and March 2010, according to information from the National Credit Union Administration. Total membership for Virginia-based credit unions reached 6.7 million in March of this year; with an estimated 3.25 million of those members residing in the state. Many of Virginia's credit unions – especially military and government-affiliated credit unions -- have multi-state operations, so their fields-of-membership include residents of other states.

Membership growth for Virginia's credit unions consistently outpaces the national average of 1 percent to 1.5 percent. For the year ended March 2010, credit unions in Virginia experienced membership growth of 6.4 percent; following growth rates of 4.8 percent for calendar year 2008 and 4.9 percent in calendar years 2007 and 2006.

"Consumers are looking for a better deal for financial services, and they're finding it at Virginia's credit unions," says Virginia Credit Union League President Rick Pillow. "Consumers are heeding the advice of the major media outlets and consumer advice columnists that have been urging consumers to move their money to credit unions to take advantage of free checking, lower fees, better rates and more personalized service."

Another area in which Virginia-based credit unions continue to shine is in lending to members with small businesses. As banks reined in business lending, Virginia's credit unions posted double-digit growth rates for member business loans, including 31.9 percent growth for the year ended March 2010. Virginia's credit unions now boast some $621 million in member business loans, more than triple the amount of member business loans they held at year-end 2006.

Data from NCUA shows 43 of Virginia's credit unions offer member business loans, though others may enter this line of business if credit unions are successful in getting a U.S. Treasury Department-supported measure through Congress that would raise the current cap on member business lending.

Since 1998, credit unions have faced a restriction that limits the total amount of member business loans they can hold to 12.25 percent of their total assets. Legislation in Congress would more than double this cap, allowing Virginia's credit unions to provide desperately needed credit to Virginia's small businesses, perhaps as much as $275 million in the first year. Increased member business loans from Virginia's credit unions could also help small businesses add as many as 3,000 new jobs in the first year following a cap increase, according to estimates from the Credit Union National Association.

Conservative lending, strong management and a deep capital cushion have also helped Virginia's credit unions weather the worst effects of the financial meltdown and the ensuing recession. As of March 2010, Virginia's credit unions had an aggregate net worth of 9.4 percent, meaning they are on exceptionally strong financial footing. Regulators consider a credit union well-capitalized -- the highest measure -- at a 7 percent net worth ratio.

Members are also finding their credit unions to be a savings haven, with savings balances at Virginia-based credit unions having increased 10% to more than $60 billion for the year ended March 2010, led by strong increases in money market account balances and Individual Retirement Accounts (IRAs).

"Virginia's 191 credit unions are strong and well-positioned to serve their member-owners. They entered this crisis with strong balance sheets, and have money to lend despite current economic conditions," noted Pillow.

Consumers interested in finding a credit union they may be able to join, should log on to www.findacreditunion.com.

The Virginia Credit Union League is the statewide trade association for the Commonwealth's 191 credit unions, which boast $76 billion in assets and more than $56 billion in loans. Credit unions are not-for-profit financial institutions that are owned and controlled by their members. Credit unions return earnings to their members in the form of lower rates on loans and better rates on savings. Learn more at www.vacul.org.