CUs continue strong lending ways

12/7/2011

According to the Biz2Credit Small Business Lending Index, credit unions (CU) continued their loan momentum gained by bank transfer movements into November, the Credit Union Times reports.

On November 5, many consumers made the switch from large financial institutions to small banks and CUs on what was dubbed "Bank Transfer Day." Created in response to rising fees and restricted loan approvals, the event resulted in more than $4.5 million shifted from big banks to CUs in the weeks leading up to the event alone, the Christian Science Monitor reports.

The CU Times notes that small institutions continued to ride that wave into December, as CUs, community development financial institutions and micro lenders reported a 62 percent loan approval rate in last month - an increase from 61.8 percent in October.

"The biggest story is the continued aggressiveness of credit unions in small business lending," Rohit Arora, CEO of Biz2Credit, told the news source. "They are also actively soliciting deposits at the expense of big banks in order to have the money for loan making."

Banks with larger assets are beginning to return to the market, but are treading carefully in light of the European financial crisis.