NAFCU Releases 2018 Annual Report on Credit Unions
The median credit union manages only $33 million in assets and has just 8 full-time employees. By comparison, the median bank has over $210 million in assets and 45 full-time equivalent employees.
WASHINGTON – National Association of Federally-Insured Credit Unions () today released its 2018 NAFCU Report on Credit Unions. The report (attached) shows, among other things, that credit unions play a critical and growing role in our economy.
"Our 2018 NAFCU Report on Credit Unions shows that credit unions play a critical role in the economy to the tune of $16 billion annually and continually work to meet the needs of their local communities and members," said NAFCU President and CEO Dan Berger. "The credit union industry remains well-capitalized, financially sound and committed to their members – which is why the industry saw over 4 percent membership growth during the past year.”
"More than 114 million Americans are members of a credit union, where 300,000 credit union employees work daily to provide them with the best service possible. However, regulatory and compliance burdens still weigh heavily on the industry's ability to serve its membership. That's why it's so important to NAFCU – the industry's Washington Watchdog – to ensure that the interests of the nation's 5,500 federally insured credit unions are effectively represented.”The report on credit unions looks at five key areas: credit union trends, credit unions' service offerings, observations from the survey of consumer finances, policy priorities for credit unions and financial technology and credit unions.
Some of the key findings in the 2018 report include the following:
· The credit union industry occupies only a small share of the overall financial services landscape, but they provide a reliable source of credit to local communities in good times and bad.
o The median credit union manages only $33 million in assets and has just 8 full-time employees. By comparison, the median bank has over $210 million in assets and 45 full-time equivalent employees.
o The top 100 credit unions only account for 44 percent of industry assets compared to 81 percent for the top 100 banks.
· Credit unions are healthy and well-capitalized, and the industry is continuing to grow and strengthen. However, compliance burdens have led to elevated merger rates among smaller credit unions.
o As of June 30, 2018, credit union membership numbered 114 million, which represents a 4.3 percent increase over the prior year.
o Since the onset of the Great Recession, credit unions have experienced a lower failure rate than banks. From 2008 through 2017, there were 528 bank failures compared to only 184 credit union failures.
o Since passage of the Dodd-Frank Act in 2010, the number of credit unions has declined by over 25 percent at a pace of roughly one per business day;
o From 2000 through 2009, NCUA chartered an average of 7.7 new credit unions annually. However, from 2010 through 2017, that number has shrunk to just 2.4 per year.
· It is vital that credit unions retain reliable access to the secondary mortgage market.
o Among credit unions, 23 percent sell mortgages to Fannie Mae, 10 percent sell to Freddie Mac, and another 23 percent sell to both.
Credit Union Service Offerings
· Investing in technology is a priority for credit unions, as evidenced by the growth in the number of institutions offering remote deposit capture, mobile payments, and other electronic services.
· Services offered by credit unions are becoming increasingly accessible through a growing network of mobile banking, websites and ATMs.
The CU Industry: Observations from the Survey of Consumer Finances
· Credit unions have enjoyed rapid membership growth in recent years and membership penetration is consistent across most age cohorts.
· Credit union members have lower income than bank customers and tend to be more vulnerable financially.
· There are strong indications that households view the credit union model with growing esteem.
· Credit unions provide over $16 billion annually in benefits to the economy, and preserving the credit union tax exemption remains NAFCU’s top legislative priority.
· A primary concern of credit unions and their members continues to be ensuring that our nation’s retailers have data security standards to protect consumers’ sensitive financial information.
· NAFCU supports efforts to modernize the Glass-Steagall Act as a key step to producing a safer, more stable financial system.
· Credit unions continue to labor under the immense cumulative regulatory burden in the post Dodd-Frank era. The number of employees devoted to regulatory compliance has more than doubled since 2010.
· As the Federal Reserve works to update and improve the payments system, NAFCU's goal is to ensure that it will be cost-effective, operationally effective, and scalable for credit unions of all sizes.
· Modernized field of membership (FOM) rules are crucial to the future welfare of the credit union industry. NAFCU will continue to support and defend the NCUA’s FOM rule.
Financial Technology and Credit Unions
· Financial technology (“fintech”) is an ill-defined term that encompasses a broad range of products and services. For traditional lenders, fintech firms represent both an opportunity and a threat.
· Regulators have taken tentative steps toward increasing their oversight of fintech firms, but non-bank lenders still enjoy a tremendous advantage over the highly-regulated credit union industry.
· Credit unions plan to increase their investment in technology, particularly as it relates to optimization of member development.
About the Report:
The information gathered in the 2018 NAFCU Report on Credit Unions is based on the association's Federal Reserve Meeting Survey, an annual assessment of NAFCU members covering topics discussed in the report. The report also draws on data collected for NAFCU's Economic & CU Monitor and CU Industry Trends Report.
The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go to or on Twitter.
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