As we move into 2011, I would like your readers to know thereare good news stories to tell about credit unions-stories thataren't always getting the notice they deserve. As Credit UnionTimes reported in its Dec. 8 issue (“Data: CUs' HeavyChallenges”), NCUA's data shows that credit unions' net income andnet worth increased during the third quarter. But in fact, the newsis even better. The $3 billion increase in net income reportedactually represents a nearly 80% year-over-year increase. And weneed to remember that capital levels remain strong and arerising-with the net interest margin, operating expense ratio, andloan loss provision all improving in 2010.

There's also a brighter story about credit union lending, whichwasn't told in the Dec. 8 article. Here are some key pointsCallahan & Associates brought up in our third-quarter “TrendWatch” that I believe everyone in the credit union community willfind encouraging.

At a time when many financial institutions continue to keep atight fist on lending, credit unions reached their highest point inthird-quarter loan originations in five years. The $70 billion inloan volume during the quarter means credit unions were originating$1 billion each business day. First-mortgage originations grew 45%from the second quarter; 2.2% year over year. Consumer lending alsorose, up 6.2% from the second quarter.

More importantly, credit unions are doing exactly what they'resupposed to do-help members' financial well-being. Their mortgagerefinancings are giving many members much-needed lifelines, addingbetween $100 and $200 a month to consumers' household incomes. Forexample, Wright-Patt Credit Union has more than $600 millionmortgage dollars in queue for its CUSO, and approximately 80% ofthose are refinancings.

Statistics may not lie, but they are always subject tointerpretation. At first glance, credit union lending may seemflat. But looking a little deeper, we see positive signs in thenumbers. We believe credit unions should make big plans for2011.

Jay Johnson

EVP

Callahan & Associates

Washington, D.C.