California Credit Unions Generate $17 Billion Impact

Credit unions serving members in California recently generated a $17 billion annual impact to the state’s economy, which supported 104,800 local jobs and also produced $1.5 billion in savings to those members according to a special report released today by the California Credit Union League.

The economic impact of both locally-headquartered and non-local credit unions serving members across the state in 2016 was equal to the same positive effect as some of the nation’s largest corporations in America, including Kraft Heinz, General Mills, Xerox, and Facebook—each having approximately $17 – 18 billion in annual revenue.

As they pump financial benefits back to members through offering better interest rates on loans and deposit accounts, as well as lower or no fees, these 404 credit unions were serving more than 10.2 million members across the state through a mixture of online and mobile banking channels, as well as a network of 1,643 branches that members can visit in person.

In a separate local quarterly-trends report, 328 credit unions headquartered in California collectively hit records in membership (nearly 11 million members), money lent-out ($112 billion), and deposits ($150 billion). These statewide trends in first-mortgages, second-mortgages, HELOCs, business loans, new and used auto loans, credit cards, and other consumer loans give a snapshot of how local consumers are currently spending their money.

“Credit unions’ combined ripple effect in the broader economy cannot be ignored as their financially cooperative, not-for-profit model reinvests local dollars back into local economies,” said Diana Dykstra, president and CEO of the League. “These reports reaffirm credit unions' efforts to empower their members by helping them make wise financial decisions and thrive.”

Both reports come at a time when local policymakers engage in a renewed focus on the economic health of individuals. Household wealth and socio-economic mobility are increasingly seen as being tied to opportunities in financial education, an area many credit unions consider their strength.

“Research shows that up to half of wealth inequality may be caused by differences in financial literacy,” states a January 2017 Education, Income and Wealth article published by the Federal Reserve. “As a result, people are more likely to use costly home loan mortgage products, pay higher transaction costs and fees, and use high-cost borrowing options.”

The report showing a positive economic impact of $17 billion was commissioned by the League and independently completed and published by ECONorthwest, an economic research and consulting firm in Portland, OR. The study looked at balance sheet, regulatory “call report,” and operational data to come to its conclusions. ECONorthwest completed an independent analysis of credit unions surveyed and used a “multiplier-effect” model to extrapolate its economic conclusions.

Contacts
For questions or to speak with a local credit union, contact Matt Wrye, media relations manager for the California Credit Union League (909-212-6043). For commentary on the local economy, contact Dwight Johnston, chief economist for the California Credit Union League (909-215-3657)

The California Credit Union League
The California Credit Union League is based in Ontario, CA and is the state trade association for 328 credit unions headquartered across California. The League represents the interests of nearly 11 million individuals who are member-owners of their locally-headquartered credit unions. Credit unions help consumers afford life and prosper!

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