U.S. and Canadian Credit Unions - US

Published by: Mintel International Group Ltd.

Published: May. 1, 2007 - 141 Pages

Table of Contents

Scope and Themes

What you need to know

Abbreviations and terms

Abbreviations

Terms

Executive Summary

Canadian credit union statistics, year-end 2006

U.S. credit union statistics, year-end 2006

Credit union marketing—examples

Targeting Hispanics

Securitization

Other trends

Online and word of mouth strategies

The credit union consumer

Future trends

Overview of the Credit Union Sector

A bit of history

Credit unions—an inadvertent advantage

Market trends

Small business lending

Small business entrepreneurs

The credit union difference

So why should consumers use credit unions?

Figure 1: Credit card pricing—credit unions versus banks, 2007

Demographic Market Drivers

Canada—age demographics

Figure 2: Median age of the Canadian population, 1921-2004

Figure 3: Frequency respondents have changed banks in last five years, by age, December 2006

The shortage of peak borrowers in both Canada and the U.S.

Figure 4: U.S. credit union savings versus loans, 2006 and 2007

Figure 5: U.S. households shift in financial asset mix, 1984 and 2004

Figure 6: Canadian credit unions—income from traditional sources, 1995-2003

Economic Market Drivers

Figure 7: New single-family houses for sale—U.S., 1963-2006

Figure 8: Existing single-family home sales—U.S., 1999-2006

Figure 9: National Association of Realtors’ median sales price, existing single-family homes, 1968-2006

Figure 10: Mortgage loan purchase composite index—U.S., 2002-06

Technological Market Drivers

Figure 11: Percent of all respondents who use the Internet, year end 2000-April 2006

Canada—technological market drivers

Figure 12: Canadians' primary methods of banking, 2005

Figure 13: Potential steps to increase trust and protect privacy—Canada, 2005

Figure 14: Reasons for adult home users to go online, 2005

The U.S.—the rise of the machine

Electronic banking/technology

Technological developments—budgeting

The ‘electronic member’—building relationships

Are there any financial institutions that have unique or very individual online experiences?

Market Drivers—Focus on Hispanics

Targeting Hispanics

Figure 15: U.S. Hispanic population and projections, 1950-2050

Figure 16: Hispanic buying power, 1989-2004

Micro-financing and Hispanics

Figure 17: ACCION's partners*, 2006 statistics

Figure 18: U. S. Hispanic firms, by paid employee, 2002

Hispanics and education

How do we do it?

An actionable plan for credit unions and the Hispanic market

Financial product development

A payday product

Technology loans

Remittances

Figure 19: Volume of remittances distributed by credit unions in six countries, Q3 2001-Q4 2003

Figure 20: Uses of remittances—Central America and Mexico—IDB/MIF Central America survey, 2003

Figure 21: Remittance cost considerations for credit unions, 2003

Regulatory Issues

Canadian regulatory issues

Canadian and U.S. regulatory differences

Regulatory environment—field of membership restrictions

The progressive part of the country

The not so progressive parts of the country

Basel II—capital requirements

Figure 22: Capital ratios of banks and credit unions in the U.S., 1980-2005

Securitization

Canadian credit union securitization

Figure 23: Canadian credit union assets in securitized issuance, January 2007

U.S. credit union securitization

Overall Market Size and Growth

Market size

Canadian credit unions

Figure 24: Canadian credit unions at a glance, 2007

Figure 25: The Canadian credit union system—market tiers, 2006

U.S. credit unions

Figure 26: U.S. credit union facts at a glance, 2004

Figure 27: U.S. credit union market tiers, 2005

A decreasing number of credit unions—with a growing membership

Figure 28: Number of U.S. credit unions, 1997-2005

Figure 29: National credit union membership trend, 2001-06

Canadian credit unions

Figure 30: Number of credit unions in Canada, 1987-2005

Figure 31: U.S. credit unions total assets, 2001-06

Figure 32: U.S. credit union return on assets, 2001-06

Figure 33: Canadian credit unions’ return on equity, 2000-03

Figure 34: U.S. credit unions’ ratio of delinquent loans to total loans, 2001-06

U.S. credit union loan growth

Indirect lending

One example—indirect lending in Ohio

Figure 35: U.S. credit unions’ total loans (in $ millions), 2001-06

Figure 36: U.S. credit union loan growth trends, 2003-06

Indirect lending—after the growth is gone

Figure 37: U.S. credit unions’ total value of loans, 2001-06

Figure 38: U.S. credit unions’ total loan growth rate, 2001-06

Deposit growth

Figure 39: U.S. credit unions’ total deposits, by value, 2001-06

Figure 40: U.S. credit unions’ total deposits, percentage growth, 2001-06

Figure 41: Growth in U.S. credit unions’ savings and assets, 2001-06

Figure 42: Credit union savings growth rate—percent change over previous year, 2005-07

Figure 43: U.S. credit unions’ total surplus funds, 2005 and 2006

Canadian credit union growth

Figure 44: Canadian credit unions’ comparative six-month growth rates, Q2 2004-Q2 2006

Market Share and Segmentation

Canadian credit unions—market share rankings

Figure 45: Canadian financial institution market share, by assets, 2005

Figure 46: Number of credit unions in Canada, 1987-2005

Figure 47: Canadian credit union ranking, by quarterly revenue, 2005

Figure 48: Canadian market share, by domestic assets, deposits, consumer credit & mortgages, 2006

Figure 49: Canadian credit union income from traditional sources, 1995-2003

Figure 50: Top ten Canadian credit unions, by asset size, Q4 2005-Q2 2006

U.S. credit unions

Loan growth performance by segment

Figure 51: Key year-end performance results, 2006

Figure 52: Top 20 U.S. credit unions, by loan growth—greater than $500 million, December 2006

Figure 53: Top 20 U.S. credit unions, by loan growth—greater than $100 million to $500 million, December 2006

Figure 54: Top 20 U.S. credit unions, by loan growth—greater than $50 million to $100 million, December 2006

Figure 55: Top 20 U.S. credit unions, by loan growth—greater than $10 million to $50 million, December 2006

Figure 56: Top 20 U.S. credit unions, by loan growth—greater than $2 million to $10 million, December 2006

Figure 57: Top 20 U.S. credit unions, by loan growth—less than $2 million, December 2006

U.S. credit union market segmentation by asset size

Figure 58: U.S. credit union distribution, by asset size, 2005

Figure 59: Top 20 U.S. credit unions, by assets, 2005 (1)

Figure 60: Top ten credit unions, by number of members in 2005

Figure 61: Top ten credit unions, by number of employees in 2005

Canadian and U.S. competitive landscape

Advertising and Promotion

Responding to customers

Marketing for growth

Customer surveys—one viewpoint

Customer surveys—another viewpoint

Customer surveys—an example

Demographic and psychographic marketing

Marketing strategies—targeting the Hispanic market

A credit union opportunity

Figure 62: Hispanic survey—which language do you use for Internet marketing programs specifically geared to target Hispanics?

Internet advertising and search engine optimization

Figure 63: U.S. online searches, by engine, February and March 2007

Word-of-mouth marketing

The U.S. Consumer

Summary highlights of consumer survey

Membership

Figure 64: Credit union membership and/or eligibility, by gender and age, April 2007

Figure 65: Credit union membership and/or eligibility, by income, April 2007

Figure 66: Credit union membership and/or eligibility, by race/ethnicity, April 2007

Figure 67: Credit union membership and/or eligibility, by employment status, April 2007

Credit unions as primary provider

Figure 68: Credit unions as primary provider, by gender, April 2007

Figure 69: Credit unions as primary provider, by age, April 2007

Figure 70: Credit unions as primary provider, by income, April 2007

Products provided by credit unions

Figure 71: Financial products owned by credit union clients and/or credit union-eligible clients at a credit union, overall, April 2007

Figure 72: Financial products owned by credit union clients and/or credit union-eligible clients at a credit union, by age, April 2007

Figure 73: Financial products owned by credit union clients and/or credit union-eligible clients at a credit union, by Hispanic/non-Hispanic, April 2007

Figure 74: Financial products owned by credit union clients and/or credit union-eligible clients at a credit union, by region, April 2007

Figure 75: Financial products owned by credit union clients and/or credit union-eligible clients, where products are owned, overall, April 2007

Figure 76: Advantages of using a credit union for a loan(s) and/or credit card(s), April 2007

Figure 77: Advantages of using a credit union for a loan(s) and/or credit card(s), by age, April 2007

Figure 78: Advantages of using a credit union for a loan(s) and/or credit card(s), by Hispanic and non-Hispanic, April 2007

Figure 79: Advantages of using a credit union for savings/checking/investments, by gender, April 2007

Figure 80: Advantages of using a credit union for savings/checking/investments, by Hispanic/non-Hispanic, April 2007

Are customers feeling valued?

Figure 81: Perceptions of retention efforts by financial institutions, April 2007

Figure 82: Perceptions of retention efforts by financial institutions, by age, April 2007

Figure 83: Perceptions of retention efforts by financial institutions, by income, April 2007

Joining the credit union “club”

Figure 84: Importance of links to community, work, or other groups, by gender, April 2007

Figure 85: Importance of links to community, work, or other groups, by Hispanic/non-Hispanic, April 2007

Future and Forecast

Future trends

The future couldn’t be brighter

Revolutionary change?

A checklist for revolutionary change

Market forecast

Credit union assets

Figure 86: Forecast of total U.S. credit union assets, at current and constant prices, 2006-11

Figure 87: Forecast of credit union assets, at current and constant prices, 2006-11

Forecast factors

Appendix: Trade Associations

Credit Union Organizations

State Credit Union leagues

Canada trade associations

Appendix: Advertising and Promotion

Figure 88: Navy Federal Credit Union mailing, September 2006

Figure 89: CUNA Mutual Insurance Company/Hartford Federal Credit Union mailing, April 2007

Figure 90: AM Federal Credit Union/Liberty Mutual auto insurance mailing, April 2007

Figure 91: SCE Credit Union Premier Money Market Account mailing, October 2006

Abstract

Canadian and U.S credit unions have always experienced unique challenges and opportunities when compared to other financial services providers. This report looks at the current state of the credit union sector and the competitive landscape, including:

• Historical trends that continue to have an impact on credit unions
• Factors driving deposit and loan growth
• Regulatory issues and their likely outcome
• Potential future scenarios for the sector and the likelihood of their development

This report contains an overview of the entire market, citing developing trends, followed by a detailed breakdown of specific market drivers. Understand what motivates change and how consumers feel about different incentives and marketing strategies. Distinguish behavior in different life stages and lifestyles. Target consumers within specific regions and demographic groups. You'll have a competitive edge when you understand consumers through this exhaustive Mintel report.

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