YOUNGSTOWN, Ohio – Leaders of credit unions that operate in the Mahoning and Shenango Valleys are reporting an increase in auto loans and a cooling in the home loan market as borrowers react to rising interest rates and l ‘inflation.
As the 74th recognition of National Credit Union Day approaches Oct. 20, total credit union assets at the end of the second quarter were $2.14 trillion, up 8.1% compared to the previous year. Insured stocks and deposits rose 7%, or $110 billion, according to the National Credit Union Association.
Leaders of credit unions in the region are reporting growth in assets and memberships as they navigate an environment that remains impacted by the economic toll imposed by the pandemic.
The Business Journal contacted representatives of three credit unions that operate locally. They are Christine Blake, CEO of Cardinal Credit Union in Mayfield Heights, which operates a branch in Austintown; Sandi Carangi, CEO of Mercer County Community Federal Credit Union in Hermitage, Pennsylvania; and Michael Kurish, president and CEO of the Austintown-based Associated School Employees Federal Credit Union.
Associated School Employees Credit Union, which offers memberships in Mahoning, Trumbull and Columbiana counties, reports assets of $180 million and just over 14,100 members, Kurish says.
Both are growing, although he acknowledges the net change has slowed due to the average age of older residents here.
“We’re doing a good job of replacing them with younger members,” Kurish says. But the growth rate is slower “than you would have if you didn’t have older limb deaths.”
Cardinal Credit Union entered the Mahoning Valley market in 2015 with its acquisition of Tri-County Credit Union in Youngstown, followed by mergers with Edison Financial Credit Union and Youngstown City Employees Credit Union. The 20,000-member credit union holds about $300 million in assets, according to Blake.
“It’s a very good market for us,” she says. Throughout the pandemic and various “economic ups and downs,” as she describes them, Cardinal Credit Union has “been lucky as an institution and done very well.”
Blake also commends the Cardinal staff for engaging with its Mahoning Valley members to help them with their finances and leave them in a better position.
“My staff know the members,” she says. “That’s exactly what credit unions are.”
Mercer County Community Federal Credit Union has about 12,000 members, up from about 9,000 just five years ago, Carangi reports.
Assets stand at nearly $110 million, up from $68 million when she started with the credit union.
“Most of this has happened in the past two years,” Carangi says. “That’s a pretty big growth number for us.”
Carangi points to a few factors that are helping to drive the growth of Mercer County Community Credit Union.
The credit union received approval to expand its charter in 2021, allowing it to serve customers in Mercer County as well as surrounding Lawrence, Crawford and Venango counties in Pennsylvania as well as Columbiana, Mahoning and Trumbull counties in Ohio.
The credit union also upgraded its core processing system, allowing it to do more, and updated its mobile app.
In addition, the credit union supports several non-profit community organizations, which helps to increase its visibility and encourage the growth of its members.
Employment has also increased to 30. “Technology allows us to do a lot more, which has naturally attracted more people,” says Carangi.
Over the past few years, the credit union has renovated its Sharon office and is now preparing to replace its 3,500 square foot building on North Hermitage Road with a new building more than triple its size, or about 12,000 feet. squares, Carangi said. The building he purchased will be demolished to make way for the updated branch.
Like other institutions, ASECU has been working to develop its remote products and improve its tools, an effort that the pandemic has made more of a priority. It became a selling point for new members who chose not to walk into the credit union offices, Kurish says.
The credit union rewrote its home banking platform to provide members with additional capabilities to not only manipulate or transfer money between internal accounts, but also to transfer funds to or from accounts they have elsewhere.
In addition, ASECU’s mobile banking products provide “clearer and faster access to their account information and allow them to monitor their plastic card activity,” says Kurish.
With the technology in place, the alternatives available to consumers for their financial needs are more important than ever, he adds.
“One of the things we see as we grow our digital platforms and make access more accessible to our members is that every time we bring that level of convenience to them, we also bring the level of convenience to bad actors,” he says.
“And we see that there are benefits for our members if we can provide them with this information easily so that they can more quickly see any strange activity that may be occurring on their accounts,” Kurish continues. “We give them the ability to lock their cards themselves, so they can stop any suspicious activity while they investigate.”
All financial institutions face a volatile economy that includes the Federal Reserve raising interest rates in an effort to stem rising inflation.
Interest rate hikes have “significantly” affected home lending, for purchases and refinancing, Cardinal CEO Blake said. For the past few years, before interest rates started to rise, many customers were refinancing and Cardinal Credit Union was “a really good place for a lot of people in the area to refinance their mortgages.” said Blake.
Real estate is also being affected by fewer homes available for sale, people delaying purchases of available properties due to interest rates, and a lack of new construction due to supply chain issues.
“If you could go back maybe five years, [auto lending] would have been a bigger part of our business,” says Cardinal’s Blake. This segment continues to struggle due to supply chain issues. “It’s not the same as before the pandemic,” she adds.
Among the bright spots for Cardinal are business loans. “Our business loans are strong in all areas of northeast Ohio,” Blake says. “Business lending has been strong as businesses rebuild and restart. It did us good. »
Real estate activity at ASECU has declined in recent months due to rising interest rates
and inflation, “working in concert”, says Kurish,
to reduce the market. He sees auto loan activity increasing, driven by growing inventory availability.
“A lot of people see the rise in [interest] rates and they want to get ahead of that curve and maybe get in a car before rates go up,” he says.
Due to rising interest rates and recent stock market declines, people are also increasingly aware of “alternative domains for deposits” – as Kurish describes it – and are looking for certificates and other accounts. which can offer higher rates of return, the CEO of ASECU said.
Auto loans account for most transactions in the Mercer County community, a turnaround from the past two years, when that activity “collapsed quite dramatically,” Carangi says. “We’ve seen incredible growth in auto loans.”
This is partly because vehicles have become more available, but also because buyers are trying
get loans “before rates really go up a lot,” she says.