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Last month, I covered the credit union surge past the $1 trillion mark in assets, and the National Credit Union Administration has just released new stats that show how nonprofit financial institutions reached the milestone: a record number of members.
According to the NCUA quarterly report, credit unions now have approximately 92.5 million members. Consumers have been flocking to these fee-friendly homes over the past year to avoid new fees at banks. In a year-over-year comparison, checking account deposits climbed 11.4 percent, and savings deposits increased by 8.3 percent.
All these figures got me thinking: What's happening at banks? Sure, some of them have dealt with some public relations nightmares, but is it actually creating an impact on the banking industry's bottom line?
Not really. I took a look at the Federal Deposit Insurance Corp.'s latest quarterly report to get a grasp on how America's banks are performing, and it shows that anti-banking attitudes don't appear to be taking a big toll on banks. In fact, the nation's banks collectively reported a profit of $35.3 billion in the first three months of 2012, which is a $6.6 billion improvement when compared with the same time period last year.
However, there are signs of disruption. Total loan balances fell, and the flow of deposits slowed dramatically. The report points to a specific section of the banking industry that took the biggest hit in deposit dollars, too. "Most of the current quarter's decline occurred at a few of the largest banks that previously received a major share of the inflows," the report states.
While deposits are slowing at big banks, they aren't just competing with credit unions, either. Prepaid cards are growing in popularity, too, showing that more consumers are turning away from banks for alternative ways to manage their money.
What do you make of all the numbers? Should banks feel threatened by credit unions and alternative payment methods? Or will the vast majority of consumers keep their money where it is?
Although credit unions may not have the outrageous, unnecessary fees created by the GREEDY amongst us they are still less than desired since they too use their member's money giving very little in return with regards to interest. How nice would it be if those of us who wish to do so could just withdraw our money and stash it away in our own private safes. Credit unions are doing us no favors with their very low interest rates on savings/money market accounts/CDs.