Loan growth has been outpacing savings growth in institutions throughout the nation.
By ROBERT COLE, The Kansas City Star, Tue, Oct. 31, 2006
Kansas City credit unions have thousands of members and millions of dollars in total assets. But they could use more money.
Deposits at credit unions and banks are in decline this year, said Rob Givens, president and CEO of Mazuma Credit Union in Kansas City. Yet deposit increases are a core resource for institutions that provide loans and financial services.
“That’s how we grow,” Givens said. “People aren’t saving as much, and they’re finding other opportunities.”
Nationwide, loan growth continues to outpace savings growth, according to the Credit Union National Association in Madison, Wis.
Year-to-date savings growth is 1.8 percent, down from 2.3 percent for the same period last year. Loan growth is 6.2 percent year-to-date, but down about 2 percent from 2005.
Local deposits can be significant, however. Mazuma’s assets totaled nearly $310 million at the end of 2005.
The Credit Union of Johnson County, with more than 43,000 members, had assets of $175.5 million.
Year-end totals at Lenexa-based CommunityAmerica Credit Union exceeded $1 billion, ranking it in the top 10 of area deposit leaders.
Dennis Pierce, CEO, said that CommunityAmerica will continue to expand its branch network, which numbers 16 area locations. The credit union offers services to more than 200 select employee groups within their primary field of membership, including YRC Worldwide and Harley-Davidson Motor Co.
Although credit unions tend to pay higher dividends and offer lower service fees than other institutions, the local market is very competitive for insured deposits, Pierce said.
Internet-based banks that offer high rates are literally buying deposit accounts, even though they offer only a limited set of services, Givens said. A credit union won’t have the lowest rate on every product at all times.
“People seem willing to have multiple financial relationships,” Given said. “They seek a higher return on some portion of their portfolio.”
Despite numerous online services, Mazuma’s brick and mortar presence is important, Givens said. Since September 2005, the credit union has opened new locations in Raymore and Lee’s Summit and will soon offer services at the new IRS Processing Center near Union Station. Mazuma serves more than 51,000 members who live or work in Jackson County and in three Clay County ZIP codes.
