Credit unions are disappearing fast in Ohio.
It’s a trend that sounds dire for the alternative banking industry and its customers, but it’s not, experts say.
The number of credit unions has tumbled 12.5 percent over the past five years in the state, falling to 356 this year. The dwindling numbers, which mirror a nationwide decline, are the result of widespread industry consolidation and not credit unions simply shutting their doors, experts say.
In fact, membership and assets are growing, as the remaining credit unions are becoming stronger.
Membership rose from 2.6 million to 2.7 million and assets climbed from $19.3 billion to $24.4 billion over the same time.
“In order for credit unions to survive and offer a value, they are merging with other credit unions,” said Rose Bartolomucci, president of Towpath Credit Union in Fairlawn, which merged with TeleCommunity Credit Union in 2011. “They aren’t necessarily going away.”
She predicts the trend will continue, in part, because of increased regulatory pressure from the state and federal governments with only about 150 left in Ohio five years from now.
Some smaller credit unions and those that rely on specific businesses for membership haven’t kept up with technology, stayed on top of regulations or attracted new members, said Michael Wettrich, who oversees credit unions as a deputy superintendent for the state Department of Commerce Division of Financial Institutions.
That has led to their demise and need to merge, he said.
He estimated that 90 percent of the credit unions that are disappearing are actually joining with others, so it’s only their name going away.
Nationwide, the number of active credit unions peaked at 12,977 in 1970. Last year, there were fewer than 4,300 in the U.S.
The industry consolidation has helped and not harmed customers, experts say, with more members having access to ATMs, online banking, business loans and even phone apps than ever.
“In 99 percent of the cases where a merger occurs, it’s usually to the benefit of the member, especially those seeking more technology in their everyday banking needs,” said Patrick Harris, a spokesman with the Ohio Credit Union League, a trade group in Columbus.
Credit unions have always thrived on providing personal service.
“We will pick up the phone and answer it — a real person,” Bartolomucci said, laughing.
That’s why Jessica Ellis of Fairlawn uses a credit union.
“They’re smaller and easier to work with,” she said during a recent visit to the Towpath branch on Smith Road in Fairlawn. “Some of the banks, because they’re so big, they don’t really think of the little people, I guess.”
Rick Armon can be reached at 330-996-3569 or email@example.com.
©2013 the Akron Beacon Journal (Akron, Ohio)
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