Credit Unions Making a Difference for Virginians I MPACT R EP ORT 2013
Credit Unions: Proudly Serving Our Members With the economic downturn and a slow recovery, many Virginians have found themselves in financial circumstances that have impacted their employment, their credit score, and their ability to save money and pay bills. These Virginians have, in record numbers, turned to credit unions as a financial partner to help get back on their feet. Due to the incredibly positive media coverage credit unions have received these past few years, tens of thousands of Virginians are discovering the Credit Union Difference for the first time. As member-owned cooperatives, our mission is simple: Help our members. Credit unions are proudly and consistently fulfilling this mission by meeting the financial needs of Virginians from every walk of life, with a special focus on those of moderate income. $882 Million Direct Financial Benefits for Credit Union Members Here in Virginia Credit unions provide financial benefits to members through lower loan rates, high saving rates, and fewer fees than banking institutions. The Credit Union National Association (CUNA) estimates that Virginia credit unions provided $882,387,199 in direct financial benefits to the state s 8.1 million members during 2013. People Helping People: The Credit Union Way Salem, Va.-based Freedom First Credit Union partnered with the Federal Home Loan Bank of Atlanta (FHLB) to administer down payment assistance, homelessness prevention, rehabilitation, weatherization, and veterans set-aside programs. The FHLB set-aside programs were launched in 2011 to help individuals and families purchase or improve the accessibility, safety and energy efficiency of their homes. With Freedom First s coordination, nearly $1 million in outside funding was directly invested in the communities it serves and 31 homes were improved through the program in 2013, including the home of veteran James D. (pictured right). By meeting certain requirements, participating homeowners can have the construction loans and down payment assistance forgiven. Homeowners who remain in their homes for at least five years are eligible for loan forgiveness assistance. The programs also feature a financial education component for participants, which teaches basic budgeting and money management skills. Veteran James D., a member at Freedom First Credit Union, participated in the credit union s home rehabilitation program, made possible through a partnership with the Federal Home Loan Bank of Atlanta. Improvements to the home included roofing and a new back deck.
Loan Product Comparative Interest Rates (%) By Loan Type (December 2013) 15.69 10.04 11.24 11.52 10.91 10.38 4.01 2.48 2.65 4.47 2.91 2.95 3.69 3.70 4.53 4.59 4.38 4.39 60-month new car (A paper) 48-month used car (A paper) Unsecured loan (A paper) 5-year adjustable rate 1st mortgage (0 pts) 15-year fixed rate 30-year fixed rate 1st mortgage 1st mortgage (0 pts) (0 pts) Home equity / 2nd mtg 80% LTV (0 pts) Credit card - classic Credit card - gold Virginia Credit Unions Virginia Banks Thousands of New Credit Union Members Total Membership in Virginia-Based Credit Unions 10 Mil 8 Mil 6 Mil 4 Mil 2 Mil 0 2007 2008 2009 2010 2011 2012 2013 Nationally, memberships increased by 2.4 million (2.5%) in 2013. In absolute terms this represents the largest one-year increase in history, while the percentage increase was the highest in 15 years. Virginia credit union results generally mirrored the national trends. Memberships in the state s credit unions increased 8.4% in 2013 (the fastest pace in 27 years). At year-end 2013, the state s credit unions boasted a membership total of 8.41 million, having added 653,000 members in 2013. The 8.4% fullyear increase in memberships was substantially higher than the 0.9% pace of population growth in the state. In total, Virginia-based credit unions saw their membership rolls increase by almost 1.5 million new members since the end of 2010.
$52 Billion In Loans Were Originated in 2013 Virginia s credit unions continue to be a critical source of credit for the millions of Virginians who choose to bank with us. The origination total was by far the highest annual total recorded by Virginia s credit unions in their 85 year history. $1.1 Billion $741 Million in Outstanding Member Business Loans Total Dollar Amount of Mortgage Loan Modifications Credit unions are playing an important role in getting our economy back on track. Granted by Virginia-based credit unions. More than $57 million in mortgage loan modifications were originated in 2013 alone. We are providing loans to members with small businesses ($386 million in 2013 alone) that are helping them create jobs, purchase equipment and grow! $18 Billion In First Mortgages Originated in 2013 Virginia-based credit unions are increasingly seen as the best choice for members choosing a mortgage lender. 72,920 first mortgages were originated in 2013.
$25.2 Million Dollar Amount of Small Loans Granted in 2013 Virginia s credit unions helped 19,588 members with small loans ($3,000 or less at origination) during 2013.* * Based on 26 credit union responses to a Virginia Credit Union League survey. 53% 470,153 Percentage of Small Loan Recipients With Poor or Very Poor Credit Share Draft/Checking Accounts Added in 2013 Where an individual holds their share draft/checking account is still considered a strong indication of primary financial institution status. Of the small loans extended in 2013 by the 26 credit unions responding to our survey, 53% of loan recipients were identified as having Poor or Very Poor Credit comparable to a credit score of 620 or below. Another 20% were identified as having Average Credit comparable to a credit score of 620 to 660. In 2013, Virginia-based credit unions saw a net gain of 470,153 share draft/checking accounts. 30% Percentage of Small Loans Used to Meet an Emergency Need When asked to identify the loan purpose of their small loans, credit unions noted that members often needed the money to meet an emergency need. As examples, almost 10% of the loans were used in part or in whole to repair a vehicle, while 4% were used in part or in whole to cover medical expenses.
Caring For Our Communities Virginia-based credit unions have partnered with Children s Miracle Network Hospitals for more than a decade, collectively raising more than $2 million for the charity in that time, including a record-setting $406,236 in 2013. Belvoir Federal Credit Union Employees and their families spent Thanksgiving evening of 2013 at Fort Belvoir base, serving Thanksgiving dinner to military families in need and soldiers on duty for the day and unable to leave the base. Credit unions believed in social responsibility long before it came into vogue four decades ago. Founded as a social movement, credit unions have put their people helping people philosophy to work in aiding their member-owners and their communities. In 2013, Virginia-based credit unions proudly reached a number of milestones in our decadelong partnership with our charity-of-choice, Children s Miracle Network Hospitals. We celebrated our biggest fundraising year yet, raising $406,236 in 2013 for the hospitals serving the Commonwealth. Since the start of their partnership with CMN Hospitals in 2003, Virginia-based credit unions have collectively donated $2,086,236 to the charity. Nationally, Credit Unions for Kids, an umbrella brand through which credit unions and affiliated organizations support children s hospitals, raised more than $10 million for CMN Hospitals in 2013. Through Credit Unions for Kids, the credit union system and its partners have raised more than $120 million for CMN Hospitals since 1996. Of particular interest in 2013, credit unions in both the Washington, D.C. and Norfolk hospital markets ranked in the top 10 nationally among all Credit Unions for Kids markets for total donations. Credit unions have such a passion for their communities and we are honored to call them our partner! says Amy Dickstein, programs coordinator for Children s Miracle Network Hospitals (Richmond, Va.). They should be commended not only for their monetary contributions to Children s Miracle Networks Hospitals and their other organizations of choice but also for their volunteer spirit and enthusiasm. Thanks to the support of valued partners like our credit unions, CMN Hospitals across Virginia are able to provide world-class care and treatment for the children in our communities.
Educating Our Members & Communities Youth Financial Education Classroom Presentations (2012-2013 School Year)* Credit unions continue to teach basic personal skills to community groups and in school classrooms. Richmond Postal Credit Union, for example, recently taught girl scouts the basics of budgeting and the importance of saving money for long-term financial goals and to meet emergency needs. Credit unions throughout Virginia enthusiastically prove our commitment to financial education. As one of the first states to embrace in-school branches, our in-school branches now number 76 strong from elementary schools through a presence on college campuses. Credit unions initiatives include: Financial Literacy Boot Camp - Teaches credit unions how to deliver financial education and training in their communities. In recent years, programming has included information for credit unions in setting up Volunteer Income Tax Assistance Programs. Financial Counseling - The Virginia Credit Union League is aiding credit union employees in earning certification as personal financial counselors, so they can, in turn, help their members. Almost 100 certified financial counselors have graduated through this program in the past three years. Those counselors are now better able to aid members in developing household budgets and creating plans to pay off debt. Top 10 States Based on Number of Personal Finance Presentations Given (Youth) Michigan 2,181 Missouri 541 Texas 1,440 Virginia 499 North Carolina 824 Arizona 487 Oklahoma 754 Washington 479 Oregon 616 Illinois 473 Top 10 States Based on Number of Students Reached with Lessons on Personal Finance North Carolina 56,308 Virginia 21,174 Michigan 44,945 Florida 20,728 Texas 2,835 Massachusetts 20,509 Oklahoma 24,782 Illinois 18,526 California 24,113 Pennsylvania 15,711 * Based on data compiled by the National Youth Involvement Board, a credit union organization dedicated to promoting personal finance training for young people and to assisting credit unions in serving the next generation of credit union members. As one of the original founders of the Virginia Jump$tart Coalition, we continue to work closely with Jump$tart, particularly in its efforts to reach the state s public school educators and provide them with resources to teach personal finance skills in the classroom. Our work with the Jump$tart Coalition includes helping champion financial education initiatives before the General Assembly. Virginia is one of the first states in the nation to require a course in personal finance for their high school graduating seniors. To help the educators prepare for this initiative, the Virginia-based credit unions coordinated, sponsored and presented free one-day workshops,the Real Money Experience, all across the Commonwealth, showing educators the content, resources, and connections that are available to help them in the classroom. Almost 1,000 teachers have attended these workshops.
Elisa s Story: Rethinking Spending Habits & Saving For Elisa S., a Belvoir Federal Credit Union member, a broken water pipe at her home looked to be an overwhelming financial disaster on top of an already growing list of bills. But with a referral to Kelli Anthon, Belvoir Federal s financial coach, Elisa was about to learn the critical steps she needed to put her financial house in order. With Ms. Anthon s coaching and help, I started to see a light at the end of the tunnel. She helped me organize my spending and developed a debt reduction plan with the budgeting tools and resources available at Belvoir Federal. Since I started using these tools, I became much wiser in spending my money and started to save, says Elisa S. With a savings program in place, Elisa has also started to rethink her spending habits. I actually see cash left over at the end of the month! I have to think twice before buying something. If I buy it, it is because I need it and not want it! My daughter is learning from me. She sees me Educating the Next Generation of Members Virginia-based credit unions are among the most active nationally in teaching financial education basics to young people. The Northwest Federal Credit Union Foundation has helped lead that charge. A self-published children s book covering spending, saving and giving is teaching children the importance of properly managing money. Our credit unions are taking basic personal finance topics and presenting them in such a way that young people learn how to make good decisions with their money. Belvoir Federal Credit Union s Kelli Anthon (pictured left) helped member Elisa S. develop a budget, rethink her spending habits and begin to save. trying to save money and she s doing the same thing. We try to eat at home more often and save money and eat healthier. She has even suggested recycling grocery bags to use as trash bags to save money. Overall, the Financial Coaching and Education Program is helping me to reach my goal to eliminate my credit card debt. I know I can do this and be debt free soon! Since 1999, our credit unions have collectively reached 282,849 students with lessons in personal finance basics and that commitment is only strengthening thanks to credit unions launch of the Credit Unions Care Foundation in 2009, which proudly promotes financial education as one of its core missions. For the Northwest Federal Credit Union Foundation, financial education, especially for young people, has become an important focus, even prompting the credit union to publish a children s book authored by an employee on the importance of using money wisely.