HARAHAN, LA – Credit unions are creating stronger financial foundations for more than 1.2 million members across Louisiana and fulfilling the role for which they were created, serving as both a key economic driver for the state and provider of competitive financial services and benefits for members.
That according to Anne Cochran, Chief Executive Officer of the Louisiana Credit Union League.
Cochran said the success of the credit union movement is reinforced by a new study conducted by economist Dr. Loren Scott. Measuring the economic impact of credit unions on Louisiana’s economy, Scott highlights the tremendous growth of the credit union industry in Louisiana over the last 20 years, as well as the ways in which credit unions continue to give back immensely to the state and local communities, she said.
Cochran said Louisiana credit unions have experienced a 56 percent increase in membership since 1991. On a national scale, 103 million Americans are members of a federally insured credit union, an all-time high since the ratification of the Federal Credit Union Act by Congress in 1934. This figure includes hundreds of thousands of military veterans and families that rely on their credit unions to work with them in times of service and assist in building a new life following their time in the military, she said.
The Louisiana credit union industry includes nearly 200 individual credit unions and more than 1.2 million members statewide, Cochran said. Louisiana credit unions recently surpassed $10 billion in total assets for the first time ever, signifying the industry’s growth throughout the state.
Through a not-for-profit, financial cooperative approach, credit unions are also generating thousands of family-wage jobs, Cochran said. In 2014 alone, credit unions employed more than 3,600 Louisianians across the state, producing $204.3 million in credit union worker compensation.
Cochran said Louisiana credit unions are providing families and small businesses with direct benefits. $6.3 billion of total credit union assets are attributed to member loans, with an average loan amount granted of $10,500. Credit union members also receive the benefits of no minimum deposit accounts, fewer fees and irreplaceable personal service. In fact, 72 percent of credit unions offer free checking accounts, compared to 38 percent of banks.
Most important for Louisianians advancing in the workplace or saving for their child’s college education is the idea that credit unions are not-for-profit cooperatives, Cochran said. Credit union membership is available to all consumers, with each member having a vote in the credit union's future and success. Credit unions are governed by an elected board of directors who serve on a volunteer basis. After operating expenses, the earnings of a credit union are returned to its members through lower loan rates and higher interest rates on deposits. Credit unions do not pay corporate income taxes because a credit union's earnings are returned to their members, taxpayers themselves, not shareholders in a for-profit business, she said.
Today, credit unions are exceeding the purpose for which they were created, fulfilling the role of economic driver, community leader and small business service provider, while continuing to supply accessible financial services to individuals of all income levels in communities throughout Louisiana, Cochran said.
“They are making a positive difference in the lives of Louisianians during an increasingly difficult economic time,” Cochran said. “That is the credit union difference.”
