Credit unions continue to thrive in 2014, for plenty of good reasons. Consumers love them, so their membership numbers continue to grow. Not only do these kinder, gentler alternatives to big banks have an edge in terms of customer service, interest rates, terms, and products, they are financially smart. In recent times, CUs (credit unions) have begun to use innovative tools and lending solutions to create healthier financial outcomes, thereby creating stronger institutions.

Lending Solutions and Credit Unions

After some of the banking snafus of the last decade, consumers have grown leery of big banks and have flocked to credit unions. Why? CUs are different. Instead of being profit-driven businesses, i.e. banks, these financial institutions are non-profit cooperatives owned by their membership. Instead of merely being customers, the individuals who deposit their money into savings and checking accounts, plus take out a variety of loans at credit unions are considered members. Membership means that each individual has a say in how the organization they belong to is run; members have a voice and a vote. When it comes to auto lending, mortgages, credit cards, and savings accounts, these cooperatives are the financial institutions to turn to for the most favorable rates and terms.

CU Numbers for 2014

The more card-carrying members there are at credit unions, the better it gets for everyone. Growth in the balances of savings accounts, as well as the number of loans generated by CUs leads to stronger organizations. Also, credit union software that has recently been developed is helping each institution meet regulatory guidelines, make more profitable loans, and cut down on delinquencies. The numbers for 2014 speak for themselves:

* Savings balances are expected to increase in 2014 by 3.5%. By the year 2015, the savings growth may slacken somewhat to 3%, but because of the continual addition of new members, savings balance numbers should still be moving upward.

* Loan balances are expected to move up to 7.5% in 2014, and then increase another ½ of a percent by 2015, raising the balances to 8%. The loans are projected to be used for goods such as cars, furniture, and household appliances.

* Delinquency rates will drop, moving below 0.8 in 2015, due to expansion of jobs and intuitive software. The overall quality of credit will be boosted, due to improved forecasting through insight lending tools and computer software programs.

* Returns on assets are expected to shoot up 0.8% in 2014, and then rise even further in 2015 to 0.85%. Elevating yield on assets will increase the interest margins.

* Capital growth is expected to pass asset growth during the next couple of years, raising the capital-to-asset ratio to 11%. This figure is remarkable because it is close to the 11.5% record set back in 2006, the year before the serious economic downturn.

The American economy continues to improve, and credit unions thrive along with it. Those in the finance industry along with consumers learned many lessons following the recent economic downturn. Credit unions have learned to use all the tools that are available to them, such as innovative lending software. Consumers have learned they don’t have to rely on banks but can turn to CUs for their car buying needs.