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StumbleuponCredit unions build business memberships
Problems besetting banks have not affected credit unions, spokesman says.
Sunday, July 27, 2008
DAYTON — Small businesses are turning to credit unions more often for their financial needs, industry experts say.
In fact, "demand for credit union business accounts has never been higher," said Keith Reed, president of Cooperative Business Services (CBS), a credit union service organization.
The demand coincides with the stress on banks as they continue reporting losses.
The current economic climate hurting the banking industry has left credit unions largely unaffected, said Patrick Harris, spokesman for the Ohio Credit Union League. That's because credit unions are nonprofit, member owned and cooperative in nature, he said.
Eight credit unions in southwest Ohio and the Ohio Credit Union League formed Cooperative Business Services in 2003. Reed said the organization allows credit unions to share funding, loan services and other resources, reducing individual risks and costs.
They also developed products and services that appealed to the small business community, such as business checking and savings accounts and lines of credit, he said.
Credit union managers say the number of small business members has grown since the inception of CBS, though they're still outnumbered by individual members.
"I think the credit unions are seeing an increase in opportunity to serve the small business member," Reed said.
Banking leaders argue small businesses ought to stick with banks for their financial needs. Most Ohio banks focus on small business and can essentially offer any financial service a business needs.
"I don't think credit unions should be serving small business at all," said Mike Van Buskirk, president and CEO of the Ohio Bankers League. "That's not what they were created for."
But that's where they're headed, local credit union managers say.
Credit unions offer the same lending solutions as banks, managers say, but are less regulated and have more underwriting flexibility, allowing them to take on clients too small for large banks.
"We think the structure difference of credit unions offers more to our individual and business members," said Bill Burke, president and chief executive of DayAir Credit Union.
And even though credit unions were originally designed to serve consumers, more businesses are joining, said Donna Hale, member business services manager for Wright-Patt Credit Union.
"Small businesses are opening accounts and because of their level of satisfaction, they're telling their peers," she said.
Contact this reporter at clevingston@DaytonDailyNews.com.
