‘Individual Ownership’ Model Fuels Local Economy
Inland Empire – Nearly 16,000 consumers over the past year chose to become members of a local credit union headquartered in the Inland Empire(counties of San Bernardino and Riverside) as of Sept. 30, 2017 (third quarter), according to the 3rd Quarter Credit Union Trends Report for the Inland Empire.
The Inland Empire now boasts 357,000 individuals who are “member-owners” of 23 locally headquartered credit unions — a level not seen since 2010 (the record high was 376,000 members in 2008). Each person owns an equal share of his or her respective credit union, with all profits reinvested to benefit every member in the form of lower interest rates and lower or no fees.
How these credit union members are spending their money on homes, remodeling projects, new and used automobiles, higher education, surviving life events, and other big-purchase items provides a key barometer into what’s happening across the local economy. (For local context you can view the latest Inland Empire economic forecast hosted in October 2017).
This news release reflects year-over-year trends in local loans and deposits and is published by the Ontario, CA-based California Credit Union League. Local consumers who are members of Inland Empire-based credit unions:
- Continue taking on first-mortgages to purchase or refinance homes. First-mortgages rose 9 percent, reaching $404 million — an amount not seen since 2009 and very close to the record peak in 2008 ($412 million). (This may include fixed-rate, adjustable-rate, purchase, traditional refinance, and cash-out refinance mortgages)
- Are turning home equity into cash for remodeling or other large purchases. Home Equity Lines of Credit (HELOCs) and second-mortgages combined decreased 4 percent, dropping to $146 million — stooping to a level not seen since 2003.
- Have slid into the driver’s seat of a newer car or truck more often. Used auto loans rose 12 percent, hitting a record $583 million. New auto loans rose 28 percent, reaching $476 million — an amount not seen since 2006.
- Remain true to the habit of paying for life through credit cards. Credit card lending rose 10 percent, reaching $103 million—an amount not seen since 2009.
- Are trying to save more money and increasingly using credit unions to transact purchases/bill-pay. Total deposits rose 8 percent, hitting a record $3 billion (including record individual amounts in checking, savings, and money market accounts).
“These credit union trends will continue as long as the economy continues to perform well,” said Dwight Johnston, chief economist for the California Credit Union League.
He noted some areas of concern. Employers are having increasing difficulty finding workers in a tight labor market, which will limit economic growth “to some degree.” He also has concerns the economy may start running out of steam by late 2018. Consumer spending might be “good” by then, but its growth rate could still disappoint. If Wall Street reacts negatively to consumer spending numbers versus expectations, businesses could somewhat pull back on spending and hiring plans.
However, “There is nothing that suggests an economic slowdown is imminent, which makes the overall picture for credit unions bright,” Johnston said. “In fact, the business-skewed tax bill should accelerate growth through at least the third quarter of this year.”
California Credit Union League
The California Credit Union League is based in Ontario, CA and is the state trade association for 318 credit unions headquartered in California (as of third-quarter 2017). The League represents the interests of 11.4 million credit union members across the state who are member-owners of their credit unions. Credit unions help consumers afford life and prosper!
