ARLINGTON, Va.-NAFCU has surveyed members to provide some perspective on credit union service to those of modest means in its latest edition of the Flash Report. NAFCU's research department painted a picture of the modest means-friendly services its members offer by focusing on minimum deposits for savings vehicles, payday loan alternatives, and unique loan programs offered by credit unions. Most Flash respondents (83%) said they have no minimum deposit requirements for share drafts. Of those that do require minimum deposits, all of them said it was less than $500. Ninety-five percent require minimum balances for share certificates, but 93% of those were $1,000 or less. Thirty-two percent of respondents said they offer alternative products to payday loans. Three-quarters of those credit unions also provide financial education services for their members. Over half (53%) offer special programs for first-time homebuyers. Nearly all (92%) offer free share draft accounts. The median balance on share draft accounts among NAFCU members was $1,800 with a high of $3,924 and a low of $800. "Credit unions are offering various unique loan and share programs. Examples include credit rebuilder loans, interest only and 40-year mortgages, youth savings programs, and better loan and share rates for active duty military members and veterans," the report found. Specifically, 77% offer other loan options if an applicant is denied; 52% offered a shorter amortization schedule and 41% offered higher interest rates. Another 35% require a direct debit for the loan payment, 6% require a co-signor and other options included a larger down payment and lower loan amount. "Many credit unions appear to be reaching out to low- to moderate-income members," the Flash found. "Sixty percent indicated that they offer community services oriented toward low- to moderate-income members. Further, 28% of the credit unions offer assistance to community development credit unions." CU Overview Loan growth for Flash participants reached 15.4% in the 12-month period ending in November, up from 14.8% growth recorded for the 12-months ending in October. Total credit union loans climbed to $473.7 billion in November. NAFCU projected 2005 loan growth to reach 11.5% falling to 8.5% in 2006. "Strong loan demand coupled with the dearth of share inflows pushed the total credit union loan-to-share ratio to 80.2 percent and the loan-to-asset ratio to 68.0 percent. These levels have not been recorded since the early 1980s," NAFCU reported. However, NAFCU's Flash participants' loan-to-share ratio reached 85.1% in November; 100% of the increase was due to revolving credit. "Our members tend to loan more.tend to do more real estate, more volume, than your typical credit union," Taylor explained. So far liquidity has not been a problem for credit unions generally due to help from the corporates and loan participations, he added "Definitely, the system seems to be working." At the same time, Flash participants' share growth for the 12-month period ending in November was just over 6.0%. Total shares fell to $590.4 billion in November. Share growth is only expected to reach 3.5% for 2005, according to NAFCU, but should grow at around 5.5% in 2006. The economist said, "I think credit unions will begin to reprice more aggressively." Up until now it has been more cost effective to go to the corporates, Taylor said. "I'm really curious to see what the survey comes up with for next month," he said, explaining that the February survey will cover credit unions' liquidity concerns. NAFCU forecast that credit union return on average assets should reach 0.91% for 2005 and creep up to 0.95% this year. NAFCU-member credit unions' outlook for loan demand for January is more optimistic than it was in December but there are variations across the regions. Auto lending's future is likely to be "moderately stronger demand," while used auto loans are expected to pick up significantly. Unsecured lending brings a slightly less positive forecast and real estate prospects are mixed. [email protected]