Credit Unions in an Uncertain Economy
Economic news comes fast and furious these days, doesn’t it? No doubt the flood of information has many of us thinking about our money, jobs, debt ceilings, spending, and most of all, our individual prospects for the future - or our children’s future. When it comes to WPCU, you may also be wondering: How is our credit union doing during these turbulent times?
The fact is Wright-Patt Credit Union is doing well, our staff is working hard for members, and we’re enjoying sound financial results. The same can be said for most of our nation’s credit unions. The strength of credit unions is no accident, even during these difficult times. Indeed, credit unions have always been counter-cyclical in nature and tend to do very well when economic uncertainty is at its highest.
That’s because most credit unions in the U.S. were formed during the Great Depression, perhaps the most uncertain economic episode in our country’s history. Banks in the 1930s were struggling, many failed, folks had no access to credit, almost a quarter of working Americans were unemployed and the economy was in shambles. With little help available from the traditional financial system at that time, folks turned to each other to form financial cooperatives to provide for their financial needs at a time when no one else would.
These first credit unions were thoughtfully designed specifically to help people during the toughest of times. Depression-era credit unions were locally owned, self-governed, without investors or a profit motive, and acted locally to help members survive the economic turmoil of the day. All of these characteristics are still true of credit unions today – we’re still owned by members to provide local solutions and help folks get ahead on a not-for-profit, cooperative basis.
Look at the situation today. The debt of the United States has been downgraded by one rating agency. Congress is arguing how to reduce a massive budget deficit where $0.40 of every dollar the government spends is borrowed. Unemployment remains stubbornly high. The stock market is volatile, to say the least. Folks are looking for a safe harbor for their hard-earned money. And what about credit unions?
The fact is, Wright-Patt Credit Union is meeting the needs of its members as well as ever, and members are taking great care of their credit union. Just one example: in just the last six months WPCU has put over $10 million back in the hands of its members by refinancing tens of millions of dollars in high interest loans to lower monthly payments. Financial results for the cooperative are also excellent: Deposits are growing at an annual rate of more than 14%, earnings are strong at more than 1.2% of assets, and net worth – WPCU’s primary measure of capital and safety – is at almost 10.5% and growing.
This story of credit union success has been quietly playing out across the nation. Indeed, the $952 billion credit union system in the United States will soon surpass the assets of the $1.2 trillion thrift industry. This will make credit unions the second largest depository system in the U.S. – and the only system built on cooperative, not-for-profit, member-owned values.
- Credit unions support, directly or indirectly, more than 900,000 jobs nationwide;
- Credit unions have tripled their share of the first mortgage market in just three years;
- Credit unions now hold more than $1 billion in low cost, private student loans;
- Credit unions have become the largest locally owned lenders in many communities and did not pull back on lending activity even during the height of the recent financial crisis.
In the end, credit unions cannot be bought or sold. At Wright-Patt Credit Union, we earn our livelihood in the Miami Valley. We serve our friends and neighbors; we sit alongside the very folks we serve at little league games, bridge clubs, in church – all over the community. As I’m fond of saying, “So goes the community, so goes Wright-Patt Credit Union.” I believe we have a stake in the success of the Dayton region – and that if our members are successful, so will be the communities in which we live.
Tough times? Maybe – but that’s when credit unions excel. WPCU is in a good place, serving good people. As always, it is a pleasure serving you.
Douglas A. Fecher
President & CEO
Wright-Patt Credit Union, Inc.