Free Checking No Longer Enough to Woo New Members: Report
As the number of members joining credit unions continues to grow, keeping the momentum going may mean offering more than free checking accounts to keep them around.
Through the first five months of 2013, total membership was up 1.4 million to 97.4 million, according to CUNA Mutual Group’s July Credit Union Trends Report, which tracked data through May. The year-to-date increase in 2013 is roughly 300,000 above YTD 2012 results.
While the membership count is up 2.3 million year-over-year and 3.8 million since the impact of Bank Transfer Day in 2011, credit unions might have to continue to do more to keep new members loyal.
“We do not believe these gains are sustainable unless new members are joining for access to credit,” said Dave Colby, chief economist for CUNA Mutual. “If they come for free checking only, we likely lose money on marginal deposits and the account servicing costs.”
Making loans to these new members should be the top priority for the foreseeable future, Colby offered, adding, as it benefits the new members as well as the credit union’s bottom lines and capital growth.
According to the trends report, at its current level, membership counts are above CUNA Mutual’s year-end 2013 forecast. Still, credit unions are expected to trim membership rolls late in the second half of the year as they have in the past, Colby noted.