The Number

The money spigot has opened wider at California credit unions, with the industry’s trade association reporting a record year for lending in 2016. The state’s credit unions had more than $112 billion loaned out at the end of last year, a 13 percent year-over-year increase. The total includes new mortgages, refis, new and used auto loans, credit cards and consumer and business loans, according to the California Credit Union League in Ontario. Mortgage lending by credit unions rose 13 percent to $56 billion, while business loans rose 6 percent to $850 million, the league reported. Steve O’Connell, chief executive at California Credit Union in Glendale, No. 3 on the Business Journal’s list of credit unions with assets of $1.5 billion, said lending at his institution increased last year and he cites less competition for the industry’s good fortunes. “Community banks have been in consolidation mode,” O’Connell said. “They have consolidated into larger commercial banks. Credit unions have stepped into the gap, especially on small business lending, left by those consolidations. Small business lending has been a big portion of the growth, at least at CCU.” California Credit Union just finished a consolidation of its own. In February it completed a merger with North Island Credit Union in San Diego County. O’Connell was previously chief executive at North Island. While loans increased 13 percent, deposits at credit unions gained 9 percent last year to $150 billion. The fact that deposits are growing more slowly than loans isn’t yet an issue, O’Connell said, because historically credit unions have had “excess capacity,” with more money in deposits than demand for lending, especially in the aftermath of the 2008 credit crunch. “We were dealing with pent-up demand (for loans) from 2012 to 2016,” he said. “But now the industry has absorbed that excess.” – Joel Russell