Idaho credit unions reaping the benefits of population boom

Credit unions in Idaho are some of the healthiest and fastest growing in the U.S., due largely to the state's growing populace, a strengthening local economy, and a preference for membership in credit unions. 

Idaho ranks at or near the top in several statistical categories including loan and membership growth, according to the latest data from the National Credit Union Administration. Separately, a study to be released next month by the consulting firm ECONorthwest indicates that more than 1.3 million Idahoans — 66% of the state's population — hold accounts with credit unions. 

While the population of Idaho grew just under 11% from 2018 to 2022, according to the U.S. Census Bureau, the ECONorthwest study commissioned by the GoWest Credit Union Association (the trade group for credit unions in Arizona, Colorado, Idaho, Oregon, Washington and Wyoming) found that membership in credit unions increased more than 30% in that period.

"Credit union growth and expansion [have] been due in part to the overall growth and diversification of the state's economy," said Steven Peterson, associate clinical professor of economics at the University of Idaho. Credit unions "have also been stakeholder-focused and have marketed their services effectively," Peterson said.

As a result, Idaho credit union employment grew 67% cumulatively from 2012 to 2022, the fastest growth in the U.S., Peterson said.

Membership growth has also been a bright spot for credit unions in the Gem State. Credit union membership grew to 134.3 million in the third quarter, and 3.3% median membership growth for the year ending at the third quarter. At the state level, only Alaska at 4.6% had higher median membership growth than Idaho.

Idaho Central Credit Union in Chubbuck is among those experiencing strong growth. By the end of the third quarter, membership grew 12% from a year earlier, to more than 534,000, for the $9.2 billion-asset institution, which is the largest credit union headquartered in the state.

"We are continually looking for ways to provide [members] value through products, services and pricing that will make their life easier, save them money and help them plan for the future," said Idaho Central CEO Brenda Worrell.

And a growing population base is making it easier to find new members.

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The state had the fastest-growing population each year from 2018 to 2021, and Idaho ranked second behind Florida last year, Peterson said. In terms of economic growth, Idaho ranked sixth in the nation in personal income growth at 8.9% from 2020 to 2021.  

"Idaho is transitioning from a historic natural resource-based economy to greater diversification that includes tourism, high technology services, financial services, retail trade and manufacturing," Peterson said. 

The state's recent population growth will likely continue, and with it will come a growing demand for financial services, said Matthew Paskash, the regional labor economist for the Southeastern Idaho region.

One explanation for a preference for credit unions over banks in Idaho is its rural character and history, Paskash said. Credit unions have also often filled unmet banking and financial needs, such as ag and business loans in parts of the country where traditional banks did not operate or have a large footprint. 

"Even as the urban population grows in Idaho, there are many communities across the state that still rely on local banks and credit unions given the absence of larger banks and financial institutions," Paskash said. "Credit union membership tends to be passed on within households; many families have a degree of loyalty to their local credit union, with parents signing their children up for accounts. So even if large banks move into town, you might expect some persistent preference for credit unions over banks."

Over the year ending in the third quarter of 2022, median loan growth was stronger in Idaho, at 19.3% than in any other state, according to the NCUA.

Idaho Central had nearly $8 billion in total loans at the end of the third quarter, a 39% increase compared to a year earlier. 

Auto and home loans are the credit union's biggest lending product lines, Worrell said. Idaho Central also established a strong commercial portfolio and expects that to continue to grow.

Many credit unions across the country have said they expect a dip in net income this year compared to 2022. Worrell said she expects to see some changes as the economy and rates continue to adjust, however, she's optimistic for the year to come based on its performance in the past and the strength of the credit union.

"We show our members we care about them individually and develop strong relationships," she said. "This drives everything we do."