Economic Downturn Could Slow Credit Union, Bank Switches
MADISON, Wis. -- With the ongoing upheavals impacting the nation's economy, members and customers might be more skittish about switching their financial institutions.
Through the first two months of 2008, membership estimates are up 573,000 according to the April issue of Credit Union Trends Report from CUNA Mutual Group. These results are showing membership up 1.6 million or 1.8% over the past year to a total of 89.9 million.
Historically, the early part of the year has shown the strongest membership gains, said Dave Colby, chief economist at CUNA Mutual. Whether those gains will continue for the rest of 2008 depends on whether the country can climb out of a sluggish economic downturn.
"We expect 2008 to be a challenging year for attracting new members as rising economic uncertainty implies households will be less likely to switch banking relationships," Colby said, adding if this year's growth forecast looks similar to 2007, membership will advance by one million before slowing in 2009 and 2010.Meanwhile, at the end of February, there were an estimated 8,346 credit unions, which reflected a net loss of 50 credit unions year-to-date and 286 over the last year.