"I like to know how many members fall into the 18-to-34 age group and income of $30,000 per year," Wirz said. "This is the group that is most likely to need consumer loans and is the group that will develop into the key savers group later when they become 55 or older."

Wirz was responding to a new Aite Group report titled The Evolution of the U.S. Credit Union Market–a survey of 101 credit unions with more than $100 million in assets. Thirty-four percent of respondents said finding ways to attract new members is among their top challenges.

"We work very hard to develop checking accounts with each new member along with direct deposit, a debit card and some type of loan," Wirz said. "When we have checking, direct deposit, a debit card, and a loan of any type, we have a very high likelihood of a long-term profitable relationship."

For SAFE and the industry as a whole, loans are the bread and butter. According to the Aite report, a mortgage loan is the most common loan offered by credit unions (71% of those surveyed offered such loans), despite the current upheaval in home loan market. Indirect lending came in second (44%) followed by student loans (42%). But credit unions have for the most part managed to stay above the subprime fallout.

"Credit unions were a lot smarter with who they were lending to," said Christine Barry, research director with Aite Group and author of the report. "We've seen much more delinquencies and charge-off rates at banks."

The report also mentioned that credit unions are "thinking outside of the box" more with their product offerings. One credit union surveyed, for example, recently began offeringgift cards. Another credit union is currently looking into creating an electronic vault service to help members in the event of a catastrophic event. As part of this service, the credit union would scan cards similar to the ones seen at the check-out lines in retail stores, according to Aite, and save important documents, such as birth certificates or even members' family photos, in an electronic vault. This service would be offered for an annual fee similar to that charged for a safety deposit box.

Barry said these new offerings are a result of member demand and keeping up with competitors.

"Competition is so intense right now," Barry said. "All financial service providers have to be more creative to differentiate themselves."

Technology, for instance, is one area where credit unions tend to be more advanced, Barry pointed out. Most credit unions have been able to achieve very high levels of online adoption by their consumer members. In fact, of credit unions surveyed, 57% have achieved adoption rates between 30% and 49% while 36% have achieved rates above 50%. "Very few banks can boast similar results," the report read.

Despite their high online adoption rates, credit unions must continually enhance their online offerings to prevent their members from banking elsewhere. Switch kits are now being used by credit unions to enable new members to easily transfer their online data from one institution to another, so online bill pay and Internet adoption no longer guarantee greater retention.

Another area of growth for credit unions is in the small business lending space. Sixty-eight percent of survey respondents said they plan to focus more attention on building their business services offerings. Barry said Aite is currently working on a report that will address small business services and lending trends among credit unions.

In terms of the type of members they attract, credit unions don't carry the stigma of "cherry picking," said Tun Wai, director of research and analysis and chief economist at NAFCU.

"Quality of member doesn't mean high income," Wai explained. "It's not just a mortgage or car

loan but what a credit union can do [for members] over time. Credit unions look at profitability,

yes, but they look at it more in terms of long-term relationships."

–[email protected]