The 23 credit unions headquartered in New Hampshire, which hold some $4.1 billion in assets, have seen growth in assets, deposits, loans and membership according to data compiled from quarterly reports released last week by the National Credit Union Administration.

Over the first nine months of the year the NH credit unions had aggregate growth in assets of 10% growing to $4.1 billion from $3.8 billion at the first of the year.  This figure was nearly double the national growth rate of 5.7%. 

Savings in New Hampshire credit unions are up by 7.5% since the beginning of the year.  Nationally savings grew by 5%.

Some of that money may have been deposited by new credit union members.  The data show that New Hampshire credit unions have added approximately 18,000 new members in 2009 to date representing a 4.5% increase.

Despite the fact that consumer has been hearing a great deal about the credit crunch New Hampshire credit unions are ready to meet their borrowing needs.  Loans outstanding at New Hampshire credit unions have grown by more than 10% or $250 million dollars since the beginning of the year.  Loans were up nationwide by 5.6%

Amidst all of the economic turmoil we have been experiencing there has been a tremendous amount of talk a bout a consumer credit crunch.  While it is true that some lenders do not have much money to lend that is not true at credit unions.

How can that be?  Credit unions follow a very simple, tried and true business model.  They take deposits from individuals and carefully lend them out to people who live and work in the community.  This contrasts with many huge lenders who gather the funds they lend by selling bonds and securities.  Now that the so called capital markets are in a constant state of flux it is hard for these lenders to raise the money that they need in order to make loans.

Credit unions on the other hand are seeing an overall increase in deposits because consumers are looking for a safe sound place for their money.  The credit union can make that money available for loans.

It is important to remember that credit unions have sustained their business model through the years by adhering to sound lending principles designed to safeguard the deposits that have been entrusted to them.  Credit unions will go the extra mile to help people get loans but they are also going to make sure that borrowers do not take on debt that they can not repay..

U.S. News & World Report: The Benefits of Credit Unions
Tuesday October 21, 10:55 am ET
By Kimberly Palmer

Full article is below and online at usnews.com

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With banks tightening lending standards and interest rates headed north, where do you turn?  For 90 million Americans, the answer is credit unions. 

Credit unions, which, unlike banks, are owned and governed by their members, are often misunderstood as exclusive places with limited services. But in reality, most Americans are eligible to join them and they provide an increasingly diverse array of services, including free ATM use, electronic banking, loans, and interest-bearing savings accounts.

Here are answers to common questions about credit unions:

Am I eligible to join a credit union? While membership in a credit union depends on belonging to certain communities, such as a workplace, region, or church, Becker says most consumers are eligible, even though many don’t realize it.  “Virtually everyone in the nation could find a credit union they could join if they went through the effort,” he says.

So how do you find one? Websites such as NCUA, Find a Credit Union, and the Credit Union National Association can help. In addition, ask around--your employer, spouse’s employer, or local government council can direct you as well. 

Do credit unions offer better interest rates? On average, credit unions offer lower rates on loans and higher rates on savings accounts--just what consumers want. This chart from the National Association of Federal Credit Unions shows that the average bank rate on a four-year, new-car loan is 6.92 percent. At credit unions, it’s 5.43 percent. Similarly, a five-year CD for $10,000 returns 3.54 percent at banks on average compared with 3.94 percent at a credit union.

Many credit unions also have limits on interest rates; federally charted credit unions, for example, have an 18 percent limit that applies to all loans, including those for cars and credit cards. 

Have credit unions been affected by the current financial crisis? Like banks, credit unions have experienced a rise in delinquencies this year, says Fred Becker, president of the National Association of Federal Credit Unions. But he thinks credit unions are less affected by the crisis than banks because a strong sense of community responsibility drives credit union members to repay their loans on time. “They realize they’re adversely affecting other members if they don’t pay back the loan,” Becker says, adding that at one church credit union, you don’t attend Sunday service without your car payment. 

Are deposits insured the same way they are at banks? Yes. Credit unions are insured by the National Credit Union Administration, which provides the same protections--insurance coverage on deposits up to $250,000--that the FDIC provides to banks.  NCUA’s website allows credit union members to check on their insurance coverage.

Do credit unions ever collapse? Like banks, credit unions can fold but, also like banks, that usually means they merge with another credit union.  Regardless of what happens, members are protected through the NCUA insurance. NCUA says if a federally insured credit union does fail, members typically receive payments for their deposits within three days.

What about financial literacy--can a credit union teach me how to make smart money decisions? Credit unions pride themselves on being a top source for financial information. Many offer seminars and information on topics such as preventing identity theft and managing credit cards.  More information on any of these topics can be found at the NCUA website or by contacting your local credit union.

Credit Unions have been getting a lot of great press lately.  Check out these links to stories that have appeared online and in the Wall Street Journal and The Boston Globe.

This story by Brett Arends first appeared in the Wall Street Journal on Aug. 26
http://blogs.wsj.com/roi/2008/08/26/for-better-banking-check-out-a-credit-union/trackback/

This Associated Press Story appeared in the Boston Globe on October 9
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20081008&id=8994598