NEW YORK (12/23/08)--Credit unions are mentioned favorably in a USA Today article about smaller financial institutions receiving deposit inflows stemming from the problems of the nation's larger banks.
The nationwide newspaper reported that "as the top tier of the financial services industry faltered, small and regional banks, as well as credit unions, started seeing their cash deposits rise dramatically as nervous Americans shied away from big banks. And despite rampant headlines about a credit freeze and plunging housing market, they have even been writing more home loans this year than last year" (USA Today Dec. 22).
Sebrina Verburgt, senior vice president of operations at United Heritage CU, Austin, Texas, told the newspaper that new members bearing cash are streaming into the $552 million asset credit union's 11 branches. The deposits are from accounts at larger banks. In September, the credit union's new checking accounts increased 52% from a year earlier. They also grew 35% in July and 43% in August.
Verburgt, who said the increases were unprecedented, noted the account with the most growth offers an annual yield of 5.01%, compared with the nationwide average of 0.22% on bank checking accounts.
USA Today also interviewed a United Heritage CU member, Clay Strange of Lakeway, Texas, who moved $20,000 into United Heritage from his money market account at Charles Schwab after reading that some money market funds were unstable. He told the newspaper he wanted his money in something that was "clearly insured."
The newspaper also interviewed Mina Worthington, CEO of Yakima Valley CU, a $240.9 million asset credit union based in Yakima, Wash. The credit union took in 433 new members in September, a 57% increase from a year earlier. It added 416 new members in October, a 22% increase. The balances on these accounts are higher, on average, she said.
Washington is headquarters of Washington Mutual Bank, which became the largest bank failure in U.S. history.
courtesy of cuna.org