Memberships, Deposits Rise at Credit Unions

YOUNGSTOWN, Ohio – Despite all the trials and tribulations the coronavirus pandemic has brought, things are moving along normally at area credit unions. As normally as they can be right now, that is. 

Three credit union executives interviewed for this story all report membership, loan and deposit volume, and use of digital products increasing over last year, putting the institutions on firmer footings to provide aid to members as the pandemic drags on.

“Things were going great prior to the pandemic,” says 717 Credit Union President and CEO Gary Soukenik. “We were in the longest economic recovery in the history of the United States. It couldn’t last forever. We knew there was going to be a recession some time. We were preparing for something, but nothing like what ended up hitting us.”

The Warren-based credit union has seen deposits rise 15% through the first eight months of the year, along with a membership increase of 7%. And, adds vice president of lending Bill Fulk, business lending is up 32%, home equity lines of credit are up 38% and mortgage lending is up 260%, driven largely by existing borrowers refinancing.

“Based on our lend rate, we’ll end the year at $456 million compared to 2019’s $300 million. An interesting part of that is that delinquency is down significantly,” Fulk continues. “We’re around 56 basis points and I just got a report that says the number has dropped to 21 basis points for the month of September, which I believe is an all-time low for the credit union. Credit quality is amazingly good and loan volume is extremely robust.”

Through the end of August, 717 had booked $304 million in loans this year, up from the $200 million posted in the same period a year ago, despite the fact that lending “came to a halt” during April as the economy slowed because of the coronavirus, Fulk adds.

At Associated School Employees Credit Union, president and CEO Michael Kurish says the Austintown-based credit union ended 2019 on a high note, setting the stage for a good 2020.

Even though the institution had to close its branch lobbies for about a month during the spring, ASECU is still ahead of last year on most of its numbers; loans are up 7%, shares 17% and assets 13%, Kurish says.

“We saw we may be in a position where we couldn’t match the funds to the lending. So we increased rates on our savings products to attract deposits,” he says. “It was shortly after the first of the year that concerns about the virus were growing and by March, it was a concern to everyone.”

And at Mercer County Community Federal Credit Union, new membership is again moving at the same pace as last year – about 100 a month, after slowing when branches closed because of the pandemic.

Meanwhile, the Mercer County credit union prepares to expand its charter beginning with the new year. With the change, says CEO Sandi Carangi, the credit union will be able to offer membership to anyone who “lives, attends school or worships” in the counties that surround Mercer County, Pa.: Lawrence, Venango and Crawford counties in that state, as well as Mahoning, Trumbull and Columbiana counties in Ohio.

“A lot of it has to do with the technology. People from the surrounding counties can access their accounts. So they’re telling other people that they’re a member of our credit union. Those people could be in Trumbull County or Lawrence County while our field of membership was limited to Mercer County,” Carangi says.

Year-to-year, she says, deposits are up and while overall lending is down, home equity loans are up. The rise in deposits, the credit union leaders all say, is likely a result of a combination of the stimulus checks the federal government issued in the spring and people reducing their spending, either because of anxiety about the economy or simply because there have been fewer places to shop.

Offering aid to members was a top priority during the hardest days of the pandemic – and will remain one, the executives agree. Part of that enthusiasm stems from the organization of a credit union, in which all members are shareholders.

“That’s our members’ money so we were going to use it to benefit our members,” says 717’s Soukenik. “We went through some expenses we wouldn’t normally have had, implemented some financial aid to members like skip payments and loan deferments.”

Like virtually every financial institution, including ASECU and Mercer County Community Federal Credit Union, 717 waived fees, offered deferments and offered emergency loans.

“We have a standard offering on the shelf that we can pull out anytime something dramatic happens. When they started laying off shifts at [GM Lordstown], we had a pretty big group of offerings that we could present to help [members] through that,” 717’s Fulk says. “We had to put some additional spin on that and we immediately pushed it out to membership.”

One of the most-used offerings at 717 was skip payments, which enabled members to delay payments on loans for 60 days. It was used on 347 mortgages and 2,104 other lending products.

“That sounds like a lot and it is. That helped probably a couple thousand families in the Valley. But we have 58,000 loans out there – so that 2,400 is 4% of our total loan accounts,” Fulk says. “On the business lending side is where we saw distress. If you’re an older economy-type business, those are the ones that have been more dramatically impacted. During the window and even a couple months after that, we granted relief to 27% of our business clients,” for a total of 42 business accounts.

In the long-term, perhaps the brightest omen is the adoption of the credit unions’ digital offerings. ASECU, Mercer County Community FCU and 717 have invested heavily in technology in recent years but the push to get members to use the offerings has sometimes been an uphill battle.

With the pandemic closing lobbies – and in some cases entire branches – customers who hadn’t used the products were then left with little other choice. At ASECU, Kurish says, the pandemic almost became “a selling point for itself,” with many members who once only did their business in branches now doing it entirely digitally.

“They continue to grow and we continue to employ new technologies and services that we’ll be unveiling between now and the first quarter of 2021,” he says. “In 2019, we had begun working to enhance our digital presence. We really wanted to take advantage of technology to allow people to do more business remotely – to let them do it at their convenience – rather than having them come to a brick-and-mortar location.”

At Mercer County Community Federal Credit Union, the expansion of its footprint from one county to seven is driven largely by technology, says Carangi, as members can now access services from farther away and are no longer confined to visiting branches to conduct business. By the middle of next year, the credit union will have effected a new core processing system, allowing nearly all aspects of banking to be handled online, from joining the credit union to completing loan applications.

“It’s a much more robust system that will really be a plus for our membership,” she says.

For its existing digital offerings, she says use has skyrocketed.

“A lot of our members have embraced technology beyond our expectations,” she says, noting the credit union saw about 10,000 logins to its digital platform and about 5,000 digital transactions per month. “That’s doubled. So we’re up to 20,000 people logging in every month. That’s a positive because they realize that no matter where they are, they have access to their credit union. [Before the pandemic] there were still a lot of members that didn’t know we had mobile banking.”

It’s a similar story at 717, where Soukenik says the number of online users is up 9%, the number of sessions is up 31% and mobile deposits are up 42%.

“The shift to digital has been accelerated by the pandemic. We’re seeing people using those services a lot more,” he says. “For online banking, we see new users coming on board. Some are new and some are existing members that didn’t use it in the past. … We have more users and they’re using it more.”