Executives at credit unions here say growth at their cooperatives is outpacing that of banks.

Many credit unions have reported double-digit percentage increases in deposits, as well as jumps in membership and loans over the last 18 months, which they say is due largely to recent banking-industry turmoil.

Deposits at Spokane Teachers Credit Union jumped 26 percent to $1.03 billion as of March 31, compared with $820 million a year earlier, says Bill Before, STCU's chief financial officer.

Although STCU, which opened two of its 14 branches earlier this year, has seen one of the highest rates of increase in deposits, credit unions throughout the Inland Northwest have done well during the recession, Before says.

In the latest available comparable figures, the National Credit Union Administration reported that deposits in Spokane-market credit unions grew by 11.86 percent as of June 30, 2008, compared with a year earlier, and the Federal Deposit Insurance Corp. reported that deposits in Spokane County banks grew 6.73 percent during that period, Before says.

That's a switch in growth trends from previous years, such as when bank deposits in Spokane County had grown by 13 percent as of June 30, 2006, compared with a year earlier, and credit union deposits in the Spokane market had grown by 9.9 percent, he says.

Deposits at Spokane Valley-based Numerica Credit Union grew to $758.8 million as of June 30, up 19.4 percent from $635.6 million a year earlier, says Jennifer Lehn, Numerica's executive vice president.

That deposit growth rate is more than double the average annual growth rate for the credit union, Lehn says.

"We believe we're perceived as a safe, sound place for people to put their money," she says.

One reason for the perception is that member-owned credit unions, as nonprofit entities, operate on a business model that puts members ahead of institutional enrichment, claims David Bennett, spokesman for the Federal Way, Wash.-based Washington Credit Union League, an advocate for credit unions in legislative and regulatory issues.

"Service to members is the No. 1 priority for credit unions," Bennett says. "Profit is not the priority."

Credit unions are locally owned and are guided by voluntary, unpaid boards of directors, he adds.

The state's 121 nonprofit credit unions added 40,736 new members during the three months ended March 31 to bring their total membership to nearly 2.6 million, Bennett says.

STCU's membership rose to 82,800 as of June, up nearly 11 percent from a year earlier, and well above its 10-year annualized membership growth rate of 3.5 percent, Before says.

"We usually see new membership activity following bank changes and mergers as people get less confident with them," he says.

Jeff Adams, CEO at Spokane Valley-based Horizon Credit Union, says people have been turning to credit unions due to "a lot of shakeups and negative news in the financial world."

"By and large, credit unions didn't engage in the types of lending practices," such as subprime mortgages and speculative construction loans, that contributed to some commercial bank failures, Adams says.

The American Bankers Association, a Washington, D.C.-based industry trade group, contends, however, that certain credit unions have a competitive advantage over banks because credit unions are exempt from federal income taxes and have deviated from their original mission to serve low- and moderate-income households.

The association's Web site calls tighter federal regulation of "an aggressive and fast-growing group of credit unions that has large fields of membership, maintains extensive branch networks, and offers products virtually identical to community banks, while tending to serve higher-income people."

Adams says the overall demand for loans has fallen during the last two years, but lending has increased at credit unions because there are fewer avenues remaining for individual borrowers to turn to, he says.

Total loans at Horizon grew to $269.5 million as of March 31, up 13 percent from a year earlier.

Bennett says car loans issued by credit unions statewide dipped only slightly, to $6.78 billion, for the fiscal quarter ended March 31, compared with $6.83 billion in the year-earlier period, despite dismal overall sales in the auto industry.

"Considering the economy and consumer-buying habits, credit unions fared well in the car-loan market," Bennett says.

Numerica is among credit unions that have focused on business loans and mortgages as other lenders have tightened their credit, Lehn says.

For the nine-month period ended June30, Numerica had issued 54 Small Business Administration-backed loans totaling $1.9 million, she says

While the dollar volume was smaller than the loan volume issued by some commercial banks, Numerica had the fourth highest number of such loans issued by all lenders in the SBA's Seattle District, which encompasses most of Washington state and North Idaho, Lehn says.

Numerica's total loans rose to $661.6 million as of June 30, up 6.5 percent compared with $621.2 million a year earlier, and the credit union's dollar-volume of first-mortgage originations for the first half of the year is more than double that of the year-earlier period, she says.

Statewide, first- and second-mortgage loans at credit unions totaled $10.5 billion for the quarter ended March 31, compared with $3.3 billion in 1999, Bennett adds.

Business loans to members make up the fastest-growing lending sector for credit unions nationwide, despite credit unions' statutory commercial-lending cap of 12.25 percent of assets, Bennett says. Nevertheless, for-profit banks still control more than 97 percent of business lending, he says.