CHARLESTON, W.Va. -- Consumers may have lost trust in the financial services industry after the mortgage scandals a few years back. But West Virginians continue to show faith in their credit unions by increasing their deposits, year after year.
"The good news is credit unions are in very good shape, despite a difficult two years in the financial industry," said Ken Watts, president of the West Virginia Credit Union League. "We weathered some difficult storms.
"Jobs, economic challenges ... credit unions have been an alternative to turn to," Watts said. "We've actually seen record growth.
"Statewide, we've seen asset growth this year of between 7 and 8 percent. Most of that is driven by deposits. They continue to come in."
Combined assets of the state's credit unions topped $3 billion for the first last year, Watts said, hitting $3.1 billion in June.
"We anticipate $3.2 billion by the end of the year," he said. "That's with just about 100 credit unions."
The number of active credit unions in the state has actually been dropping years. "Not just in our state," Watts said. "That's a trend nationally. There have been a number of mergers. We've seen three or four in the state. But people still have credit unions to serve them."
The growth in deposits, and thus assets, has come almost exclusively from existing customers -- or members, as credit unions call their clients. From June 2011 to June 2012, state credit unions gained just 85 customers, a .02 percent increase.
As of June 30, state credit unions had 388,492 members. "They feel safe and confident and continue to bring in more money," Watts said.
To help attract new customers, and to compete with larger banks, credit unions are turning more and more to technology.
"Twenty-four access, whether it's an app on a smartphone or improving data processing in the office ... it's not without cost and security issues," Watts said.
And as banks phase out products that used to be universal, like free checking accounts, some credits unions have found a way to compete.
Charleston-based Pioneer WV Credit Union, for example, recently rolled out two new free checking and savings accounts -- Kasasa Cash and Kasasa Saver -- that offer rewards to members who meet monthly qualifications.
Kasasa Cash is a free checking account that pays high interest -- up to 3 percent -- to customers who sign up for electronic statements and use their debit cards a minimum number times each month.
Although Watts said he wasn't familiar with Kasava, he said that's the type of technology-based service credit unions are embracing. "They have a very active marketing department and are open to offering these types of things to their members."
Pioneer, originally chartered to serve Kanawha County school employees, has grown to the sixth largest credit union in the state after switching to a community-based charter.
Despite their good health, state credit unions face challenges on the regulatory front, Watts said.
"One of the big issues is compliance -- the number of regulations they have to comply with. Congress has passed any number of bills for regulating the industry.
"Anybody in the financial industry faces the same thing, particularly after the 2008 meltdown. It's a bit of an overreach, in my eyes.
"Credit unions are having to pay for a lot of the problems they weren't responsible for. It's caused a long list of regulations. It's a broad-brush approach, and it's certainly affected credit unions."
Reach Jim Balow at ba...@wvgazette.com or 304-348-5102.