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Texas CUs member growth shines
FARMERS BRANCH, Texas (3/10/09)--Texas credit unions saw robust membership growth of 2.9% in 2008, their fastest growth since they posted 3% growth in 2003. Several factors caused the increase, Dick Ensweiler, president/CEO of the Texas Credit Union League and chair of the membership growth task force for the Credit Union National Association, told News Now. The factors include:
* Credit unions have embraced REAL Solutions for a full year, with 24 Texas credit unions signing up. “This has brought on new members who might not have normally come aboard,” Ensweiler said; * Texas has the second-largest shared service center in the U.S. for credit union members, so there are lots of points of contact with members; * Texas has a more stable economy and lower unemployment than most states; and * Of all the people who moved across state lines in the U.S. last year, about 38% moved into Texas, Gov. Rick Perry told Ensweiler.
Ensweiler said the reasons so many people moved into Texas in 2008 are because the state has a stable economy, lower unemployment than the national average, a great climate, no state income tax, and a pro-business environment. “Therefore, as more people move to Texas, credit unions are getting their share of new members,” he explained. Texas is below the foreclosure average for Sunbelt states, and it has home equity laws that are not consumer friendly. Therefore, mortgage refinancings and home equity loans have not been a big part of credit unions’ membership growth, Ensweiler said. “We focus on auto lending,” he explained. “Texas has a higher percentage of auto lending compared with all other types of lending, relative to most states. So indirect lending is big here. Lots of auto dealers in Texas use credit unions as their primary lenders. That brings in new members. We get a significant number of members through indirect lending.” The Texas league also helps credit unions deliver their safety and soundness messages to the public. “We give credit unions talking points, a safety-and- soundness tool kit, and press releases to promote their credit union to members,” Ensweiler said. Ensweiler offered some 2008 statistics, comparing Texas credit unions with those nationwide:
* Increase in money market shares: Texas 19.6% and U.S. 14.8%; * Increase in regular shares: Texas 8.3% and U.S. 5.3%; * Increase in share drafts: Texas 5.3% and U.S. 3.1%; * Increase in used-auto loans: Texas 9.9% and U.S. 5.1%; and * Increase in new-auto loans: Texas 0.4% and U.S. -6.6%.
Looking to future growth for Texas credit unions, Ensweiler said that it is important to educate consumers about two facts: credit unions are open for business and have money to lend, and credit unions are strong and secure. “In times like these, there is a tendency for credit unions to hunker down, crawl in a shell and cut back when--in fact--they have very strong reserve postures, and other financial institutions are cutting back,” he explained. “So the right philosophy is to spend a little more now on marketing and to spend more to make sure that credit union employees are trained as much as possible in service and sales,” he continued. “Because credit unions should be saying ‘We are the answer,’ instead of cutting back.” When financial institutions’ reserves are low, often they don’t want to take on more savings because they need more reserves to back them up, Ensweiler explained. However, credit unions are well-positioned with their capital and reserves to take on more savings and to issue more loans. “We are open for business,” Ensweiler concluded.
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