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CUNA Mutual CUs in better position to grow
VANCOUVER, Wash. (9/22/08)--Credit unions may be better positioned for growth than their banking peers nationwide, Dave Colby, chief economist with CUNA Mutual Group, told members of the Washington Credit Union League at its annual meeting last week. Rough times are looming for the U.S. economy and translate to slower growth--not losses--for credit unions, which have a tradition of being fiscally conservative, Colby said (The Columbian Sept. 18). “We have a golden opportunity right now,” Colby told the newspaper. “Your members are being buffeted by the talking news heads, but we know our capital. We can protect it. Financial viability is what credit unions are all about.” Because consumers generally save cash when the stock market is in turmoil, credit unions now have a chance to attract new members to their savings accounts, Colby said. With stressed banks offering unprofitable high-interest savings and certificates of deposit accounts to try to attract much-needed cash, credit unions won’t be able to compete through their rates. Rather, they will have to emphasize their conservative approach with investing and lending to garner customers worried about the health of big banks, Colby said. Credit union assets should grow at a 6.6% annual rate through the next five years, Colby projected. However, to sustain growth, credit unions will need to attract new members, particularly in light of aging members nearing retirement, he added.
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