CUs Withstand Financial Industry Turmoil with Strong Capital/Sound Mortgage Lending

Credit unions in California – representing more than 500 financial cooperatives that serve nine million consumers (members) – remain safe and sound and continue to demonstrate positive growth, according to the California Credit Union League, the state association for credit unions.

“While other financial institutions are experiencing financial difficulties and restricting services, California credit unions are well capitalized and in a great position to continue serving consumers,” said Daniel Penrod, industry analyst for the League.
According to NCUA data, credit unions experienced a strong first quarter capital ratio at 10.62 percent, an increase in savings deposits of 3.89 percent, and an increase in checking of 6.47 percent, the League reports.  Statewide, credit unions hold more than $120 billion in assets.

“Consumers can also be reassured that credit union deposits are insured by the National Credit Union Administration (NCUA), an agency of the federal government, up to $100,000 per account with additional coverage of up to $250,000 for certain retirement accounts, and also by private insurers,” said Penrod.  “Not one cent of taxpayer funds has ever been used to bail out a credit union.”

“Credit unions also offer a variety of mortgage products and for the most part have avoided the kinds of losses suffered by other lenders by steering clear of risky lending practices,” said Penrod.  Lending for first mortgages grew at a 13.03 percent rate in 2007; other real estate lending grew by 8.87 percent.

“Our nine million members in California can have full confidence in the stability of their credit unions and their capacity to provide a broad range of financial services throughout the current national economic downturn” said Penrod.   “Those consumers who are not members can visit www.findacreditunion.org to locate credit unions they are eligible to join.”

California Credit Union’s full range of business banking products is specifically designed for the small business community.  According to Patrick Zarifian, VP of Business Banking at CCU, he is very excited to having the opportunity to assist small businesses with their financing needs.  “We are poised to offer competitively priced business banking services to small businesses who are going to need a stable financial institution now more than ever.”