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CU System
Southeast Texas in good shape but feels credit pinch
FARMERS BRANCH, Texas (1/13/09)--Banks and consumers are feeling a growing financial pinch from credit card debt in Southeast Texas, an area hit with losses from Hurricane Gustav and Hurricane Ike, says the Texas Credit Union Foundation in an article in the Beaumont Enterprise (Jan. 10). The average American has 11 credit cards and about $11,000 in debt, Jill Pharr, executive director of the foundation, told the newspaper. Many larger banks, she said, face the effects of dealing with larger loans and facing bigger financial losses. Most residents are paying their debts over a year now--instead of the standard six months, said the article. While concern is growing, others interviewed maintain that Southeast Texas is weathering the credit crisis better than other areas. Financial institutions take proactive measures to ensure consumers keep up with their payments. Because its membership base is smaller, DuPont Goodrich FCU, based in Nederland, Texas, is able to provide one-on-one financial counseling to ensure the debt doesn’t affect the area as much, said Clint Wilson in the article. Wilson is marketing manager of the $157.4 million asset credit union. He noted the credit unions has to maintain a “really aggressive stance” to make sure it can provide what members need, but members must be active in financially responsible measures as well. Other credit unions are granting extensions of up to 60% forgiveness for some credit card debts and offers of consolidation loans abound, Pharr said. Credit counseling services are seeing an uptick in client activity, also. Credit cards represent about 4% of the entire loan portfolio of credit unions, according to the article, citing statistics from the Texas Credit Union Profile. As of September, the state’s credit unions reported a 1.61% credit card delinquency 60 days or more, up from 1.32% a year earlier. Credit unions have an 8.7% market share of all credit cards issued.
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