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Credit Unions See Strong Membership Growth

Data from research firm SNL Financial finds that credit unions gained nearly 700,000 new members in Q1 2013.

Credit unions gained 676,583 new members during the first quarter of 2013, according to new data from research firm SNL Financial.

That increase is the third-highest quarterly increase of new credit union members since 2006, SNL reports.

The nonprofit financial institutions have increased the total number of members to 95.7 million as of March 31, an increase of 2.11% from 93.8 million one year ago, according to the firm's data. The industry reported quarterly increase of more than 600,000 members in four of the last five quarters. Credit unions have added 2.7 million members in the last five quarters, which is greater than the combined total of previous 11 quarters.

The credit unions with the highest organic membership growth over the last year are Navy Federal Credit Union -- the largest credit union in the U.S. -- which grew to 4.3 million at March 31, 2013 from 3.9 million a year ago; followed by the Pentagon Federal Credit Union, and Raleigh, N.C.-based State Employees Credit Union.

The credit union that had the most overall, non-organic membership growth was Columbus, Ohio-based Pathways Financial Credit Union, which was created after a three-way merger of Columbus area credit unions in September 2012.

[See Also: Credit Unions Lead in Online Satisfaction]

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
6/24/2013 | 2:27:22 PM
re: Credit Unions See Strong Membership Growth
I would expect these numbers continue to rise because of the lower fees most credit unions offer for services. I think credit unions will be option many Gen Y customers will be interested in for that reason. They tend to go online and do their research before buying products and if they find they can join a credit union and get the products and services they're looking for at a lower fee cost then they'll go with that option.
ChalBay
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ChalBay,
User Rank: Apprentice
6/21/2013 | 2:09:49 PM
re: Credit Unions See Strong Membership Growth
The growth is impressive, and will continue to rise. The value add services at low cost to CU members is very enticing and when traditional banks are charging fees for everything, CU are becoming a better option i.e. 100% financing for home loans, low cost credit cards, and no min. monthly requirements.
Secondly, the mobile offerings for some of the largest CUs are ranked much higher than traditional bank mobile offerings. When you have credit unions leading the way in delivering iPad, Android, and iPhone platforms which provide ease of access, and 24/7 banking without the big fees, then choice to move to a CU becomes becomes clear. Majority of government workers at local, state and federal level are part of CUs, and with relaxed membership requirements, others see this as an opportunity to join.
marous
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marous,
User Rank: Apprentice
6/20/2013 | 7:44:56 PM
re: Credit Unions See Strong Membership Growth
I didn't want to sound like a naysayer. The member growth is impressive. The key will be whether the final result is a profitable customer. This can only be achieved through effective cross-selling. Both banks and credit unions, however, have not done the best job either with the onboarding process or subsequent use of customer insight to offer relevant products and services later in the relationship.
Byurcan
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Byurcan,
User Rank: Author
6/20/2013 | 7:29:33 PM
re: Credit Unions See Strong Membership Growth
The research did have the overall deposit figures to the top CU's, but I didn't see anything regarding the average deposit numbers associated with the new members. Regardless, you raise some very good points.
marous
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marous,
User Rank: Apprentice
6/20/2013 | 5:39:30 PM
re: Credit Unions See Strong Membership Growth
I am a bit skeptical about member/customer growth numbers without digging deeper into the average deposit numbers associated with the growth. While some customers may be looking for an alternative to big banks because of charges, are credit unions getting customers that are profitable? In addition, are credit unions cross-selling enough to make the relationship primary?

I ask these questions since we are also seeing record growth in prepaid cards, representing another category of customers who may have limited profit potential.

Finally, if recent CFI Group research on the credit union industry is correct, rates and fees will not continue to provide satisfaction leverage. To retain high satisfaction marks, members will be expecting a premier online/mobile experience. Is the industry ready?
KBurger
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KBurger,
User Rank: Author
6/20/2013 | 3:11:15 PM
re: Credit Unions See Strong Membership Growth
Why do you think this is -- continued fall-out from the financial crisis, people looking for alternatives to large banks? Better execution from credit unions in terms of providing a quality customer experience? Simple marketing, promotion, advertising prowess?
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