NYSCUL Study: N.Y. Credit Unions Boost State's Economy by $4.5 Billion

LATHAM, N.Y.- New York credit unions generate more than $610 million in taxable wages and add an estimated $4.5 billion to the Gross State Product, according to results of a new study conducted for the New York State Credit Union League. Entitled “The Role of Credit Unions in New York State,” the study quantifies for the first time the economic benefits of credit unions on New York’s economy. “Credit unions have never been more important to New York State than they are today,” said William J. Mellin, president and CEO of the New York State Credit Union League, which held a press conference June 14 in the state’s capital to announce the survey results. “In communities all across New York, credit unions are making a big difference in the lives of ordinary people.” “With credit unions in the marketplace, consumers win, whether they’re members or not,” said Brian P. O’Connor, the study’s author and an independent economist with New Jersey-based Ridgewood Economic Associates. “More New Yorkers can afford to invest in homes, cars and other assets that increase their quality of life-pumping new life into a lagging economy.” The study, stated the New York State Credit Union League, found that credit unions fill a unique role in the market. Not only do they offer financial services at a lower cost and consequently drive down competitors’ fees, “CUs also provide the added feature of market accessibility for certain segments of the population.” “The ripple effect is significant. For every direct effect credit unions have-whether in spurring economic activity through lower loan rates or creating jobs-there’s also an indirect effect that magnifies the benefit,” the League stated. The study used federal and state labor statistics and U.S. Census Bureau data. Other findings from the survey show indirect effects from firms that supply products or services to credit unions total: * 21,000 other industry jobs * $305 million in taxable wages * $13.4 million in personal income tax payments * $292.5 million in disposable income * $2.0 billion in Gross State Product In addition, CUs’ direct and indirect economic contributions include: * 30,000 jobs * $610 million in taxable wages * $27 million in personal income tax payments * $585 million in disposable income * $4.5 billion in Gross State Product In addition to the economic contributions to New York State, the survey examines how credit unions operate, identifies positive effects on local communities, and provides an in-depth analysis of New York State credit unions. For example, while total jobs in New York State declined 1.8% in 2002, CU employment statewide increased 2.9%. The League forecasts 2003 data will show the increase will top 4%. Mellin said the study’s findings prove that, “Even though credit unions’ market share in New York is less than two percent, this study shows that our positive impact on the economy is clearly much more significant.” -