Locally owned credit unions mirror national growth

Credit union leaders say a focus on community, advancements in technology and a better understanding of how credit unions operate is helping push Spokane-area membership and asset growth, following in the steps of a nationwide trend of individuals seeking alternative financial options.

With a 5 percent membership increase in 2017 and deposits and loan growth up 10 percent during that same time period, Spokane-based credit unions are helping push the national increase in those seeking to switch from traditional financial institutions.

Local unions credit a large portion of that growth to a desire to be part of a financial institution focused on doing better for members and the community, a better understanding that credit unions are open to all, not just a specific workforce, and access to technology that allows a locally owned institution’s services to be accessed around the globe.

According to the most recent data from the Northwest Credit Union Association, the 15 credit unions headquartered in Spokane have a total of 472,940 members and hold $6.8 billion in assets. Those numbers do not include Spokane residents who belong to credit unions not based in Spokane, such as BECU. Statewide, 50 percent of Washington residents belong to a credit union, according to the NCUA.

Nationally, credit unions are seeing similar growth. According to CUNA Mutual Group’s April 2018 “Credit Unions Trends Report,” credit unions picked up 417,000 new members, loan and savings balances grew at an 11 percent and 5.6 percent seasonally adjusted annualized pace, respectively, in February. Firms also hired 326,000 new employees nationwide.

The report also states credit union assets rose 6.2 percent in the past year, deposits increased 5.9 percent and borrowing went up 16.6 percent.

Ev Hopkins, chief administrative officer for Spokane Teachers Credit Union, said she believes a major reason behind individuals choosing credit unions over traditional banks lies in the aftermath of the 2001 economic meltdown.

All credit unions are classified as “not-for-profit.” Individuals join as members, not customers, and there are no stakeholders to answer to.

“I think consumers began to look at their financial relationship,” Hopkins said. “Banks got a bit of a black eye.”

Then, when Bank Transfer Day was held Nov. 5, 2011, Hopkins said people began to see what other options were out there. Bank Transfer Day started as a Facebook event created by a woman reportedly fed up with her bank’s high fees and quickly gained national social media attention encouraging people to join her switch to a not-for-profit credit union.

“I think they understand the value really is there,” Hopkins said. “From a purely financial standpoint, there is a lot more value.”

Hopkins said the typical family will save more than $100 a year if they use a credit union instead of traditional bank, through services such as lower rates and fewer fees.

STCU was founded in 1934 by a group of Spokane teachers with cash collected in a shoebox and stored in a classroom cubby at Lewis and Clark High School. Since 2012, it has seen more than a billion dollar asset increase to $2.7 billion at the end of 2017. Membership has grown from 100,000 to 177,000 since 2011, and Hopkins said STCU has averaged 2,000 new members a month so far this year.

Currently, there are 650 STCU employees and 22 branches reaching as far as Newport, Sandpoint, Cheney and Kennewick.

At Spokane City Credit Union, President Gene Fitzpatrick echoes Hopkins’ view of banks.

“The ultimate example of bad behavior is Wells Fargo,” he said, referring to the scandal that broke in 2016 that revealed the San Francisco-based bank opened about 3.5 million fake bank and credit card accounts without its customers’ knowledge.

“(Spokane City Credit Union) puts people over profit,” Fitzpatrick said. Yes, Spokane City Credit Union has to make money, Fitzpatrick added, but it operates on the philosophy of doing what is best for the members, community and company, not just what will bring in the most profit.

Originally founded for city of Spokane employees, Spokane City Credit Union began allowing employees of the Spokane Transit Authority to join in 1980. Now, anyone in the area is welcome, but the primary focus remains city and STA employees.

Spokane City Credit Union currently has 5,261 members and total assets of $42 million, an increase from $33 million in December 2013. Even with growth, Spokane City Credit Union still has a single branch with only 10 employees, Fitzpatrick said.

The credit union is “small but mighty,” he said. “We have all the stuff the big places do.”

Despite its size, Fizpatrick said, members have access to services such as online banking, shared branching and ATM surcharge refunds.

Cindy Leaver, Numerica Credit Union chief financial officer/chief strategy officer, said that “as we see more technology becoming available to help with day-to-day transactions, people want more meaningful relationships with their financial institutions. Numerica strives to have those personal interactions with our members.

“… We are committed to giving back to the community through financial education and helping causes which make this a better place to live, because this is our home, too.”

Numerica was founded 75 years ago to serve railroad employees. In August, Numerica surpassed $2 billion in assets, Leaver said, and by December had grown that by another 13 percent. Membership is also on a growth pattern, climbing to more than 135,000 members this year, she said.

Numerica currently has 446 of its 545 employees working in Spokane and North Idaho, including those at its 13 area branches, Leaver said. Since 2016, they have opened two new branches and remodeled four others, she said.

BECU, while a Seattle-based credit union, is also seeing strong growth in the Spokane market. Founded in 1935, Boeing Co. employees were required to supply their own tools before they could begin work. In the hard times of the Great Depression, an employee, William Dodge, suggested starting a credit union.

Now the largest community credit union in the country, BECU totals 1,081,077 members and ended 2017 with $17.8 billion in assets (an 8.5 percent increase from 2016).

In Spokane alone, there are 9,245 BECU members (up 42 percent from 2017) with $70.6 million in deposits (a 31 percent increase from 2017).

There has been a long commitment and investment into the Spokane expansion, said Steve Hauschild, market leader for BECU. With its third branch opened in December, he said, BECU finds Spokane to be a good credit union community. Currently there are three branches and a call center in Spokane, and soon there will be a home loan center, along with more than 170 local employees.

Doug Marshall, senior vice president of retail for BECU, said the credit union finds members tend to be very diverse in age, income, culture and race.

“Across all of those groups, it is about values and attitudes and what we stand for,” he said.

Even with a strong focus on community, locally owned credit unions are able to compete on the same national and global levels as major banks through services such as apps and online banking, shared branching and ATM surcharge reimbursements.

Dan Hansen, communications manager for STCU, said technology has helped a lot for members who travel but want to stay connected to their credit union. He said the thought that local credit unions won’t work for a frequent traveler is “a bit of misunderstanding.”

“We have thousands of branches and ATMs where we don’t have fees because we are part of a co-op,” he said.