A report the the Federal Reserve stated that credit union branches are not direct substitutes for bank branches, especially in rural America.
The study examined the closure of bank branches between 2012 and 2017. The report found that the number of bank branches declined by 7 percent across all counties during the time period studied.
While urban communities lost more branches than rural areas, the study noted that the effect of branch closures tends to be magnified in rural areas.
Participants in listening sessions described instances in which credit unions moved into or expanded their operations in the community in response to the closure of the local bank branch. Participants, who used a credit union, commented that credit unions were able to meet some of their financial needs.
However, some participants noted areas where their local credit union did not meet their financial needs.
For example, participants raised concerns about "a lack of robust small business account and credit products, overly restrictive lending policies, a lack of direct deposit services for employers, and low maximum cash withdrawal limits."
The study was not sure if these challenges identified by participants were due to the fact that the institutions cited were credit unions or these credit unions were smaller financial institutions with a more limited product and service offering.
The report also noted that when a bank branch is closed, the effects are not just limited to financial services access. Communities lose an important source of financial advice and civic leadership.
Read the study.
Showing posts with label Branches. Show all posts
Showing posts with label Branches. Show all posts
Wednesday, December 4, 2019
Wednesday, April 5, 2017
Marine CU to Buy 5 Bank Branches from Bank Mutual Corporation
Bank Mutual Corporation (Milwaukee, WI) entered into an agreement with Marine Credit Union (LaCrosse, WI) to sell five retail branches, along with deposits and loans.
The pending sale consists of one office in Kenosha, two in Racine, and two in Sheboygan, Wisconsin.
Deposits and loans from the five locations are $52.6 million and $13.2 million, respectively.
The deal is expected to close in the third quarter, pending all regulatory approvals.
The terms and price of the transaction were not disclosed.
Read the press release.
The pending sale consists of one office in Kenosha, two in Racine, and two in Sheboygan, Wisconsin.
Deposits and loans from the five locations are $52.6 million and $13.2 million, respectively.
The deal is expected to close in the third quarter, pending all regulatory approvals.
The terms and price of the transaction were not disclosed.
Read the press release.
Sunday, November 1, 2015
CUs Provided Public Funds and Tax Incentives from Local Governments for Facilities
In October, several local governments provided tax incentives or grants to credit unions for the renovation or construction of facilities.
Dupaco Credit Union will receive tax incentives for a project in the Crossroads Center area of Waterloo, Iowa. The Waterloo City Council voted to approve three years of 50 percent tax rebates, despite the city's policy provides one year of 50 percent tax rebates for every $1 million in new tax base generated. Dupaco's project will generate just $1.2 million in tax base, the additional two years of rebates were added due to the credit union's additional costs for redeveloping the site.
The Pendleton Development Commission (OR) approved a $73,049 grant to Old West Credit Union to improve the second floor of the former Bank of America building. The grant will pay 25 percent of the second story renovation and elevator cost.
The Lucas County (OH) Commission approved an economic development allocation of $100,000 to the Toledo Urban Foundation for the construction cost of a new facility for Toledo Urban Federal Credit Union.
Dupaco Credit Union will receive tax incentives for a project in the Crossroads Center area of Waterloo, Iowa. The Waterloo City Council voted to approve three years of 50 percent tax rebates, despite the city's policy provides one year of 50 percent tax rebates for every $1 million in new tax base generated. Dupaco's project will generate just $1.2 million in tax base, the additional two years of rebates were added due to the credit union's additional costs for redeveloping the site.
The Pendleton Development Commission (OR) approved a $73,049 grant to Old West Credit Union to improve the second floor of the former Bank of America building. The grant will pay 25 percent of the second story renovation and elevator cost.
The Lucas County (OH) Commission approved an economic development allocation of $100,000 to the Toledo Urban Foundation for the construction cost of a new facility for Toledo Urban Federal Credit Union.
Wednesday, July 1, 2015
VAntage Trust FCU Did Not Pay Rent to U.S. Government for Branches
A story appearing in the citizensvoice.com about the Veterans Administration (VA) targeting two branches of VAntage Trust Federal Credit Union for closure noted that the credit union branches have operated rent-free for years.
The article pointed out that the credit union has not paid rent for 62 years at the branch located at the Plains Township VA Medical Center and also has occupied Mundy Street rent-free since opening the branch 17 years ago.
Section 1770 of the Federal Credit Union Act allows for the allotment of space in federal buildings or federal lands rent free to a credit union, if at least 95 percent of the membership of the credit union to be served by the allotment of space or the facility built on the lease land is composed of persons who either are presently Federal employees or were Federal employees at the time of admission into the credit union, and members of their families, and if space is available.
However, there is no policy rationale for providing credit unions with free rent in federal buildings.
Credit unions are private organizations and as private entities, credit unions should be required to pay fair market rents on branches housed in federal buildings and on federal lands.
Taxpayers should no longer be asked to subsidize rent-free credit union branches in federal facilities.
It is time for Congress to repeal Section 1770 of the Federal Credit Union Act.
The article pointed out that the credit union has not paid rent for 62 years at the branch located at the Plains Township VA Medical Center and also has occupied Mundy Street rent-free since opening the branch 17 years ago.
Section 1770 of the Federal Credit Union Act allows for the allotment of space in federal buildings or federal lands rent free to a credit union, if at least 95 percent of the membership of the credit union to be served by the allotment of space or the facility built on the lease land is composed of persons who either are presently Federal employees or were Federal employees at the time of admission into the credit union, and members of their families, and if space is available.
However, there is no policy rationale for providing credit unions with free rent in federal buildings.
Credit unions are private organizations and as private entities, credit unions should be required to pay fair market rents on branches housed in federal buildings and on federal lands.
Taxpayers should no longer be asked to subsidize rent-free credit union branches in federal facilities.
It is time for Congress to repeal Section 1770 of the Federal Credit Union Act.
Wednesday, February 26, 2014
Lafayette FCU Targets Wealthy Virginia Suburb
Lafayette Federal Credit Union (Kensington, MD) is targetting McLean, Virginia residents -- a wealthy suburb outside of Washington, D.C..
In an advertisement announcing the grand opening of its McLean service center, the credit union stated "McLean Residents We Are Your Credit Union."
The census tract, where the branch opened, has a median family income of $176,027, which has an upper income designation. In fact, the census tract's median family income is 166.22 percent of the median metropolitan statisitical area's family income.
The advertisement was promoting low rate jumbo mortgages. This is not a financial product tailored for people of modest means.
The credit union tax exemption is meant to help credit unions meet the financial needs of people of modest means. However, the truth is that the tax exemption is often diverted to wealthier individuals, who do not need a taxpayer subsidy.
This is clearly bad public policy.
In an advertisement announcing the grand opening of its McLean service center, the credit union stated "McLean Residents We Are Your Credit Union."
The census tract, where the branch opened, has a median family income of $176,027, which has an upper income designation. In fact, the census tract's median family income is 166.22 percent of the median metropolitan statisitical area's family income.
The advertisement was promoting low rate jumbo mortgages. This is not a financial product tailored for people of modest means.
The credit union tax exemption is meant to help credit unions meet the financial needs of people of modest means. However, the truth is that the tax exemption is often diverted to wealthier individuals, who do not need a taxpayer subsidy.
This is clearly bad public policy.
Thursday, October 25, 2012
NuVision Abandons Underserved Community
NuVision's tagline is "Enjoy Life, Bank Easier." For the residents of an underserved East Los Angeles community, this just became a tad more difficult.
NuVision Federal Credit Union announced its intention to close its East Los Angeles branch on Mednick Avenue as of October 31.
The article points out that more than a quarter of the households in this community have incomes at or beneath the poverty level.
NuVision concluded that the branch, which opened 5-1/2 years ago, “is not performing at the expected level for a branch of its size and that has been open for this length of time.” In other words, it was not turning a profit.
The article also noted that the credit union just opened a branch in Costa Mesa. According to geocoding software on the FFIEC's website, the median family income of the census tract of the new branch is 114 percent of the core based statistical area's median family income.
Credit unions talk about putting people before profits, this action does not seem to be the case for this credit union.
Read the article.
NuVision Federal Credit Union announced its intention to close its East Los Angeles branch on Mednick Avenue as of October 31.
The article points out that more than a quarter of the households in this community have incomes at or beneath the poverty level.
NuVision concluded that the branch, which opened 5-1/2 years ago, “is not performing at the expected level for a branch of its size and that has been open for this length of time.” In other words, it was not turning a profit.
The article also noted that the credit union just opened a branch in Costa Mesa. According to geocoding software on the FFIEC's website, the median family income of the census tract of the new branch is 114 percent of the core based statistical area's median family income.
Credit unions talk about putting people before profits, this action does not seem to be the case for this credit union.
Read the article.
Monday, February 13, 2012
Out-of-State Branches
While credit unions have the image of being local financial institutions, many credit union operate regional branch networks. And in few cases, a credit union's branch network is almost national.
According to information from Highline FI, 347 credit union in 2011 operate branches in more than one state. Navy FCU has the most out-of-state branches with 142.
Texas and Virginia have the most out-of-state (foreign) credit unions operating in their states with 44 and 32 credit unions, respectively. (see image below)
California reported the most branches owned by credit unions headquartered in another state with 100.
Washington, D.C., Nevada, and Arkansas have the highest percentage of branches in their states owned by foreign credit unions. In Washington, D.C., 43.65% of the branches are owned by out-of-state credit unions; 26.67% of Nevada branches and 19.53% of Arkansas branches are foreigh owned.
Other states with at least 10 percent of their branches belonging to out-of-state credit unions are New Hampshire, Mississippi, Georgia, Kansas, Kentucky, New Jersey, Virginia, and Colorado. (see image below)
According to information from Highline FI, 347 credit union in 2011 operate branches in more than one state. Navy FCU has the most out-of-state branches with 142.
Texas and Virginia have the most out-of-state (foreign) credit unions operating in their states with 44 and 32 credit unions, respectively. (see image below)
California reported the most branches owned by credit unions headquartered in another state with 100.
Washington, D.C., Nevada, and Arkansas have the highest percentage of branches in their states owned by foreign credit unions. In Washington, D.C., 43.65% of the branches are owned by out-of-state credit unions; 26.67% of Nevada branches and 19.53% of Arkansas branches are foreigh owned.
Other states with at least 10 percent of their branches belonging to out-of-state credit unions are New Hampshire, Mississippi, Georgia, Kansas, Kentucky, New Jersey, Virginia, and Colorado. (see image below)
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