MADISON, Wis.-New data indicate that the surge credit unions reported in new members in the final quarter of 2011 has not only not abated, but appears to be increasing.
Numbers released by CUNA and CUNA Mutual show that through the first two months of the year some 689,000 people joined credit unions. The growth, which many anticipated would culminate with the official Bank Transfer Day on Nov. 5, 2011, was called "exceptional" by CUNA Mutual's chief economist, Dave Colby. But Colby was also quick to add a caveat, noting that earlier data on Q4 membership growth was eventually revised downward by CUNA by some 500,000 people, bringing 2011's total annual gain to 1.4 million new members.
If the numbers hold up, credit unions will have grown to more than 94 million Americans at the end of February.
Whether it turns out to be good news or great news, Colby noted the news is tempered by a trend evident in the final months of last year: the new member growth is primarily coming at large credit unions.
Still, there remains a bright spot, said Colby: "Those body counts don't count the increased deepening of relationships with existing members who probably had accounts elsewhere."
Colby said he isn't surprised to see the growth continuing even five months after Bank Transfer Day. "We as consumers tend to be slow and sluggish. I did expect a lag effect," he said, observing that consumers take their time to make decisions on everything from switching phone plans to cable television providers, and financial services are no different.
Colby said that in the long run he is projecting growth will eventually return to an average of around 1% annually, with his projection for 2012 1.3%, assuming no change in expense burdens or a need to purge low-balance, inactive members.
No Regulator Scrutiny For Now
This kind of significant membership increase might lead some to expect increased scrutiny from regulators, but an NCUA spokesperson said it isn't paying particular attention to the membership numbers-at least for now-and declined any comment on any related examiner guidance.
For his part, Colby does not anticipate a significant NCUA reaction, saying he anticipates only that it will watch ROA very closely and that he suspects that any examiner's strategy will ultimately be to take a long view. "They're going to be looking at the indicators they usually look at; I don't think it'll change the way they're doing business," he said, adding, "some people made choices and evaluated their alternatives and chose a credit union. To me, that's a good thing."
