Paying ATTENTION...
to people and their money

Kabir Laiwalla, CEO
Platinum Federal Credit Union

Report: Georgia Consumers' Savings,
Financial Prudence Increase

Savings deposits at state's credit unions grew
by 10.59 percent in 2011, lending growth slows

2011 Highlights

  • Savings deposits at Georgia credit unions increased 10.59 percent
  • Total credit union loan balances grew 4.98 percent
  • Bankruptcy filings among Georgia credit union members fell by 15.12 percent

ATLANTA (Feb. 16, 2012) - Georgians continue to improve their financial security as balances of savings accounts at the state's credit unions grew in 2011, indicating consumers maintained much of their financial prudence that has been characteristic of recent years.

That's according to the latest "Paying Attention" report from Georgia Credit Union Affiliates (GCUA), which revealed that savings deposits among credit union members increased by 10.59 percent. Also, total credit union loan balances grew 4.98 percent in 2011, down from the 11.17 percent growth rate in 2010.

The report, released quarterly, combines savings and lending data from 38 credit unions from across the state - representing 91 percent of credit union assets and 84 percent of members in Georgia - with poll responses from more than 2,400 credit union members.

"Georgians remain cautious about the recovery and many have not changed their views from a year ago," said Mike Mercer, president and CEO of GCUA. "Still, there are positive signs. While savings growth rates are slightly below 2010 levels, Georgians continue to save their money, and the number of bankruptcy filings by credit union members have also fallen."

The report also revealed:

  • Business lending grew by 13.83 percent last year1
  • Used car lending continued its modest growth at a rate of 7.67 percent in 2011
  • First mortgage balances increased by 8.94 percent during the year
  • The number of bankruptcies filed by credit union members decreased by 15.12 in 2011 when compared to 2010

"It's common to suggest that consumer behavior will change dramatically as a result of the Great Recession, similar to the way it did for the generation that lived through the Great Depression of the 1930s," said Bill Hampel, chief economist for the Credit Union National Association (CUNA). "I think that's way overblown. We may see some modest long-term changes in behavior, but nowhere near the effects of 80 years ago, simply because as severe as it was, this latest recession was minor compared to the Great Depression.

"One medium-term effect is many households approaching retirement may need to work an extra year or two," Hampel said. "Longer term, we could see modest changes in the direction of greater saving, more conservative investing, and lower home-ownership rates."

"Another bright spot in Georgia's outlook is the financial prudence of credit union members," Mercer said. "When asked how they would use their tax refunds this year, an overwhelming majority plan to either save the money or use it to pay down debt."

According to the GCUA poll, 44.4 percent of Georgia credit union members intend to use tax refunds to pay down debt, and 36.1 percent of members plan to put the refund towards savings. While Georgians' trend of saving is nothing new, the recent focus on repaying debt and postponing loans could mean consumers are rebuilding their confidence and are determined to regain sound financial security.

1This growth rate is based on a low loan base since there is currently a low business lending cap for credit unions.

Click here to view previous "Paying Attention" reports. More information about Georgia credit unions is available at www.georgiacreditunions.org or on facebook.com/creditYOUnion.

About Georgia Credit Union Affiliates
Georgia Credit Union Affiliates (GCUA) provides services and support that help credit unions meet the financial services needs of the state’s more than 1.8 million credit union members. GCUA offers advocacy, educational, operational and marketing support for Georgia’s 150 credit unions, with combined total assets of almost $16 billion. More information can be found at www.georgiacreditunions.org.

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Trends at Georgia Credit Unions
Consumer Credit
 
Consumer Savings
Growth Rates
Growth Rates
 
2011
2010
   
2011
2010
Credit Card 1.98% 6.45%   Regular Savings 10.59% 16.15%
Other Unsecured -1.60% -2.97% Money Market Accounts 7.50% 30.22%
New Vehicle -2.69% -9.96% Certificates of Deposit -1.79% -2.08%
Used Vehicle 7.67% 15.35% IRA/KEOGH Accts 3.47% 12.45%
1st Mortgage 8.94% 19.09%
Transaction Accounts
(Balances)
Other Real Estate -5.30% -3.57% Checking Accounts 16.04% 31.80%
Business 13.83% 48.42%      
Total Loans 4.98% 11.17%   Total Savings 6.65% 14.83%
Number of Bankruptcy Filings:        
2011 # of Filings   5,685        
% Change from 2010*   -15.12%        
*12 months of 2011 compared to 12 months of 2010.      
Georgia Credit Union Affiliates