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CUNA Research Reports
Industry Research
- State of Metropolitan America
September 2011 - Recovering from the Great Recession: Long Struggle Ahead for Older Americans
September 2011 - Unfulfilled Expectations: Recent College Graduates Struggle in a Troubled Economy
September 2011 - Intuit 2020 Report: Twenty Trends That Will Shape the Next Decade
September 2011 - Phishing Activity Trends Report
September 2011 - Pursuing Universal Retirement Security Through Automatic IRAs
September 2011 - The Mexican-American Boom: Births Overtake Immigration
September 2011 - more...
NEW REPORTS
CU Snapshot
| Nov '11 | Oct '11 | |
| # of CUs | 7,404 | 7,404 |
| Members (millions) | 94.2 | 94.0 |
| Total Assets ($ billions) | 973.8 | 972.5 |
| Total Savings ($ billions) | 838.1 | 837.5 |
| Net Cap. /Assets | 10.3% | 10.3% |
| Loans to Savings | 68.7% | 68.8% |
| Loan Delinq. | 1.6% | 1.6% |
Credit Unions Are Safe and Sound
Now may be a good time to remind members of deposit safety
Recent weeks have seen numerous media reports about the funding difficulties of various financial institutions resulting from the subprime mortgage crisis. These items range from the FDIC takeover of IndyMac Bancorp, to losses posted by Fannie Mae and Freddie Mac, as well as ongoing losses suffered by such giants as Citibank and Merrill Lynch.
In this environment, it's no surprise that prudent consumers are unsure about mortgage lending and cautious about their money. They're posing legitimate questions about the protections in place to preserve their personal assets.
Fortunately, credit unions have strong answers to members' and consumers' safety questions. According to CUNA:
Credit unions as a whole are healthy, with strong balance sheets.
- Credit unions are well capitalized. Their overall capital-to-asset ratio stands at a very solid 11.1% (compared to 10% for banks). In total dollars, that's a capital cushion of $90 billion.
- Credit union mortgage delinquencies at the end of the first quarter stood at only 0.7%. First mortgage charge-offs were a miniscule 0.06%.
- More broadly, credit union loan delinquencies have edged up, but still are at a very low 1.0%.
Credit unions have steered clear of the subprime mess.
- In the first four months of 2008, mortgages at credit unions grew faster than all other loans. This comes at a time when mortgage losses have forced other lenders to scale back or close their doors entirely.
- Why? For one thing, credit unions operate more conservatively and tend to hold more of their mortgage loans (about 70%) in portfolio rather than sell them to Fannie and Freddie on the secondary market.
- Secondly, credit unions are member-owned, not-for-profit cooperatives. Unlike some banks and brokers, we're not out to push loans on our members just to make a quick buck.
- Today 56% of credit unions offer first mortgages, and 90% of the nation's 90 million credit union members belong to one of the credit unions that offer first mortgage loans.
- To the extent credit unions have been impacted by the subprime debacle, it's primarily as "collateral damage"—members having trouble making payments on other loans because of subprime mortgages they've gotten elsewhere, or because some members are losing their jobs in today's down economy.
- Credit unions went into this with strong balance sheets, and they'll still be strong when it's over.
Federal insurance covers credit unions, too.
- Virtually all credit unions are federally insured by a fund that, like the FDIC, is backed by the full faith and credit of the U.S. government.
- As the FDIC does for banks, the National Credit Union Share Insurance Fund (NCUSIF) insures savings at least up to $100,000 per account (with additional coverage of up to $250,000 for certain retirement accounts).
- The NCUSIF is administered by the National Credit Union Administration (NCUA), an agency of the federal government.
- The NCUA recently reported that the NCUSIF at mid-year remained strong, with an equity-to-insured deposits ratio estimated at 1.24% as of June 30 and projected to rise to 1.28% by year end.
- A relatively small number of credit unions (less than 170, with under 2% of all deposits) have opted for private deposit insurance. Private insurance funds typically have an equity ratio even higher than the federal fund, and state regulators oversee privately insured credit unions. A credit union opting for private insurance is required to disclose this to its members.
| Resources for Members | |
|---|---|
| For more information on federal share insurance, CUNA has a number of resources including brochures Your Insured Funds and When Times Are Tough We Can Help, plus a statement stuffer Credit Unions: Safe and Sound available to order to help your members understand the protections in place for their funds on deposit.
Other CUNA resources include: We're Here for You drive-up envelope Home & Family Finance Resource Center Tough Times Series Search for "Tough Time Series" in the Resource Center's search box. | |
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