Testimony
Senate Committee on Banking, Housing, and Urban Affairs' Financial Institutions and Consumer Protection Subcommittee

Doug Fecher, President and CEO, Wright-Patt Credit Union
Tuesday, October 4, 2:30 p.m.
Dirksen Senate Office Building, Room 538

Mr. Chairman and Members of the Committee:

Thank you for the opportunity to speak to you about responsible consumer lending practices.

My name is Doug Fecher, and I am President and CEO of Wright-Patt Credit Union, a $2.1 billion financial cooperative serving more than 210,000 members in Dayton, Ohio, a community hit hard by a challenging economy. In the last three years, Dayton has lost thousands of jobs, leaving many of our credit union members to face an uncertain financial future.

Attached to my testimony are several alarming statistics that put the struggles of the typical consumer in perspective.

     »  A decade ago, the ratio of household debt to disposable income was roughly 80%,
         which, proportionally, allowed people to effectively manage their debt. Today, that
         ratio is closer to 120%, leaving the typical consumer with little safety margin to help
         them cope in difficult times.

     »  Consumer savings rates have plummeted. Two decades ago, consumers saved
         nearly 12% of their disposable income; today they save less than 5%.

     »  Home prices have dropped dramatically in the last five years, decreasing in value 
         more than 13% in 2008 and 5% so far this year.

Clearly, the need for affordable financial services has never been greater.

This is precisely where credit unions like Wright-Patt excel. To some, our nation’s credit unions, as not-for-profit, democratically controlled cooperatives are anachronisms in our modern financial system. But credit unions are different by design with an intensely local focus that has paid enormous dividends during this time of financial crisis and slow economic growth. The numbers speak for themselves:

     »  Every year of the past four (2007-2010) our nation’s 7,300-plus credit unions
         have granted over $250 billion in loans;

     »  Credit union members have over 45 million loans outstanding;

     »  Credit union loan quality is the strongest of all insured financial institutions, with
         60-day delinquency of just 1.6%, compared to bank 90-day delinquency of 4.4%;

     »  Credit union net charge-offs peaked in 2009 at 1.22% of all loans and are
         now below 1.0%;

     »  Credit union auto loan market share reached its peak of 22.7% when the auto
         market was at its most difficult point ever during the Great Recession (and in
         many cases credit unions were the only active lenders in their communities);

     »  When home prices were falling at the greatest rate, credit unions achieved 5.8%
         market share in mortgage originations, its highest ever; and

     »  Credit union real estate loan modifications total over $10 billion helping nearly
         60,000 members stay in their homes.

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