Washington employees credit union

If you notice longer lines at your credit union's tellers or drive-through lanes, blame the implosion of commercial banks and financial institutions. Money is moving toward credit unions and away from their commercial counterparts, and the reason can be expressed in two words: fear and anger.

The fear ramped up during the Washington Mutual collapse, and the anger came later, at news of million-dollar bonuses for the Wall Street financiers who drove the financial system into the ground. Similar emotions were stirred in the savings and loan collapse of the late 1980s.

A wave of new credit union memberships came in September, about the time of WaMu's collapse and a coincidental internet marketing promotion by the state's credit unions. The state's largest credit union, the Boeing Employees Credit Union (BECU), which as a community credit union is open to everyone, saw its rate of membership growth jump more than 50 percent in the last half of September, Tom Berquist, senior vice president, told Puget Sound Business Journal .

The good news of this growth needs some qualification: Memberships continued to increase the remainder of the year, although random checks of the state's credit unions show a leveling-off of new memberships in the fourth quarter. While business remains sound, most Washington credit unions have also seen more delinquent loans, very slow growth in the average member's deposits, and a stagnant or declining return on assets. All of this despite an overall increase in membership and deposits.

Credit unions are preparing for harder financial times ahead, evidenced by an increase in funds set aside for future loan and lease losses. BECU held $45 million in this account a year ago; it has increased the allowance to $112 million; other smaller credit unions are also holding more funds back to deal with the danger of future losses.

Eighteen federally insured credit unions failed through December, according to NCUA. None of the failed institutions are in Washington, but several Washington credit unions merged or changed names.

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