Credit unions see growth in banking industry

Credit unions here and across the county are growing membership at rates not seen since before the Great Recession.

Membership grew 3.6 percent in 2014, the biggest jump in 20 years, according to the Credit Union National Association, and loans from the institutions increased 10.2 percent, the most since 2005.

While still only just 6.8 percent of the banking market, in terms of total assets, credit unions, which are not-for-profit financial cooperatives owned and governed by their members, boasted 101.4 million members nationwide.

“It’s kind of a joke that credit unions are the best kept secret. I think our secret is finally getting out,” said Jannell Eichstaedt, vice president of member services for Kettering-based Day Air Credit Union, established in 1945.

Day Air’s growth numbers are well over the national average, Eichstaedt said.

“We’ve averaged this year and two years prior, 5.5 percent growth. Day Air now has over 33,000 members,” Eichstaedt said.

Dayton-Based CODE Credit Union, celebrating its 75th year in business, is gaining more than 1,000 new members a year, according to its executives.

“We average 1,200 a year and now have 13,000 members,” said Scott Rutherford, president and CEO of CODE Credit Union.

The increase in credit union popularity has to do with consumer awareness, Rutherford said.

“We are doing a better job of marketing ourselves and having a more electronic presence. We have a lot of the services big banks do,” said Rutherford.

“It was kind of a battle trying to get a bank to help me out,” said Tony Pappert, who was looking to grow his business, Tony’s Landscaping, based in Moraine.

Pappert said he was having issues with banks as he tried to secure loans for his vehicles and equipment so he turned to his credit union for help about four years ago.

“Day Air has been a lot more helpful meeting my business needs. Overall, I’ve had a better experience here than when I used to bank,” Pappert said.

Misconceptions about credit unions are beginning to turn around, said Eichstaedt.

Many people think membership hinges on being a part of a specific organization or group, others think a credit union is just for saving, and more think we are strictly local, Eichstaedt said.

“Anybody who lives, works, worships, or attends school in the Miami Valley can become a member. We offer mortgages, credit cards, car loans, checking accounts, and our customers can access their accounts nationwide,” said Eichstaedt.

Day Air is part of a national share branch network, which gives customers access to 5,000 credit union branches across the country and 30,000 surcharge free ATMs.

When compared to banks, credit unions are winning in key areas: fees and customer service, studies have determined.

Bankrate has found consumers are much more likely to find a free checking account at a credit union, without strings attached, such as a minimum balance requirement. Or, at least, requirements that are easy to meet, such as having a paycheck direct-deposited or receiving electronic bank statements instead of paper ones.

Specifically, 72 percent of the nation’s biggest credit unions offer free checking accounts, compared with 38 percent of the nation’€s largest banks, Bankrate found.

Credit union fees are generally lower than what banks charge. the average overdraft fee at credit unions, is $26.78, compared with $32.74 at banks, according to Bankrate.

Banks claim it’s unfair for large, full-service credit unions to be tax-exempt and face fewer regulations when they compete head-to-head with tax-paying banks.

Credit card rates are more favorable, too. For a rewards card, the average interest rate is 9.9 percent for a credit union, compared with 12.2 percent for banks. A regular credit card is about 1 percentage point lower, on average.

“Our fee structures are better. Banks are starting to charge more fees to get the profit for their shareholders and our shareholders are our member owners, so we turn our profits back to our member owners,” Eichstaedt said.

The Associated Press contributed to this story.

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