Affinity Hawaiians Have for Credit Unions May Have Cultural Connection, Keeping Momentum Means Remembering Uniqueness
HONOLULU - Karl Yoneshige read with interest the recent findings from a study that revealed Hawaiians have more relationships with credit unions here than with banks. According to SMS Research's annual Hawaii Market Study, the state's credit unions have more relationships than some of the more high-profile banks on the...
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HONOLULU – Karl Yoneshige read with interest the recent findings from a study that revealed Hawaiians have more relationships with credit unions here than with banks. According to SMS Research’s annual Hawaii Market Study, the state’s credit unions have more relationships than some of the more high-profile banks on the islands. The president/CEO of $760 million HawaiiUSA Federal Credit Union said the reality is while Hawaiians may have an affinity for credit unions, banks still own the bulk of the market share. The credit union conducted a survey recently that showed that 45% of its membership consider HawaiiUSA FCU its primary financial institution – a percentage Yoneshige would like to see go higher. “We’re at least establishing the relationships with members,” Yoneshige said. “The challenge is to develop those relationships further. We’ve got a foot in the door, so to speak.” Yoneshige said HawaiiUSA FCU has the largest membership base in the state at 102,000, but “while a majority of them have accounts with us, that doesn’t mean they’re keeping all their deposits with us. “Other credit unions would probably say the same thing,” he said. The Hawaii Bankers Association said the study’s findings indeed show credit unions have a large share of the market from the member standpoint but not in actual dollars, said Rodney Shinkawa, the trade group’s director. Sixty-seven percent of members of $797 million Hawaii State Federal Credit Union said it was their primary financial institution, according to a 2004 survey said Deborah Kim, president/CEO. The close ties that members have for credit unions in Hawaii may be culturally connected, she believes. “Hawaii has a very large Asian population whose money culture is also based on mutual self-help of pooling funds together to lend to each other,” Kim said. “This philosophy translates well to the Hawaiian population (lending) itself to institutional trust.” Kim said because credit unions in Hawaii are limited to a defined geographic area – an island – residents have many financial institutions to choose from including the 100 credit unions here. To stand out among competitors, the key lies in having traits that are unique to the movement, she added. “If local credit unions can maintain their uniqueness and keep their personal warmth and efficient service, we will continue to hold and gain in market share,” Kim said. “I agree with CUNA and the leagues in that competition from credit unions is good for the consumers in controlling usurious pricing.” Another finding from the SMS Research study found that a growing number of Hawaii residents (30%) use a supermarket branch established by a bank, up from zero nearly a decade ago. That piece of data brought back an interesting memory for Yoneshige. HawaiiUSA FCU was very close to opening a branch in a supermarket that a bank had previously leased but the space turned out to be too small. More than that, it revealed how strong of a grip banks have on establishing branches in supermarkets. “There are not a lot of larger supermarkets here (in Hawaii),” Yoneshige said. “Those that are here are already signed up with banks. (Credit unions) are sort of locked out.” The study also found that approximately 35% of the population continues to use financial services at the physical branch. Thirty-nine percent of Hawaiians have a debit card, 31% use automatic bill payment, 42% have direct deposit, and 12% use home banking. In the area of business lending, Hawaii’s credit unions tend to be on the higher end when it comes to the average size of a member business loan, according to data from FDIC, NCUA and the U.S. Census Bureau compiled by CUNA. Of the more than 30 credit unions that had outstanding MBLs in 2004, the average loan was $287,001 with the industry having a total of $117.3 million in loans. That’s peanuts compared to the $12.5 billion banks had that same year. Yoneshige wished the study would have talked more about the credit union impact in Hawaii, but he appreciates knowing residents look to them for their financial needs. “It’s encouraging and nice to know that residents have accounts at credit unions,” he said. “It gives us the opportunity to develop relationships and multiple services.” -
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