Sacramento County Adds 110,000 New Credit Union Members

Sacramento Region, CA  |  By Matt Wrye, CCUL.org     

‘Individual Ownership’ Model Fuels Local Economy

Sacramento County, CA (MPG) - More than 110,000 consumers over the past year chose to become members of a local credit union headquartered in Sacramento County as of Sept. 30, 2017 (third quarter), according to the 3rd Quarter Credit Union Trends Report for Sacramento County.

Sacramento County now boasts 1.35 million individuals who are “member-owners” of 10 locally headquartered credit unions — a record high (the last historical peak was 1.05 million in 2009). Each person owns an equal share of his or her respective credit union, with all profits reinvested to benefit every member in the form of better interest rates and lower or no fees.

How these credit union members are spending their money on homes, remodeling projects, new and used automobiles, higher education, surviving life events, and other big-purchase items provides a key barometer into what’s happening across the local economy.

This news release reflects year-over-year trends in local loans and deposits and is published by the Ontario, CA-based California Credit Union League. Local consumers who are members of Sacramento County-based credit unions continue taking on first-mortgages to purchase or refinance homes. First-mortgages rose 11 percent, hitting a record $3.96 billion. (This may include fixed-rate, adjustable-rate, purchase, traditional refinance, and cash-out refinance mortgages). They are turning home equity into cash for remodeling or other large purchases. Home Equity Lines of Credit (HELOCs) and second-mortgages combined increased 5 percent, reaching $557 million — an amount not seen since 2015.

Credit union members have slid into the driver’s seat of a newer car or truck more often. New auto loans rose 31 percent, hitting a record $3.6 billion. Used auto loans rose 22 percent, hitting a record $3 billion.They remain true to the habit of paying for life through credit cards. Credit card lending increased 6 percent, hitting a record $628 million.

Members are also trying to save more money and increasingly using credit unions to transact purchases/bill-pay. Total deposits rose 9 percent, hitting a record $15.1 billion (including record individual amounts in checking, savings and money market accounts).

“These credit union trends will continue as long as the economy continues to perform well,” said Dwight Johnston, chief economist for the California Credit Union League.

He noted some areas of concern. Employers are having increasing difficulty finding workers in a tight labor market, which will limit economic growth “to some degree.” He also has concerns the economy may start running out of steam by late 2018. Consumer spending might be “good” by then, but its growth rate could still disappoint. If Wall Street reacts negatively to consumer spending numbers versus expectations, businesses could somewhat pull back on spending and hiring plans.

However, “There is nothing that suggests an economic slowdown is imminent, which makes the overall picture for credit unions bright,” Johnston said. “In fact, the business-skewed tax bill Congress recently passed should accelerate economic growth through at least the third quarter of this year.”