CHARLOTTESVILLE, Va. — Credit unions continued to grow assets, loans and leases, and shares and deposits in 2013 — once again led by the largest institutions — according to new analysis by SNL Financial.
The financial information firm said the positive numbers were remarkable, given the
But after several years of growth, credit unions saw their first drop in aggregate net income since 2008.
Aggregate net income at U.S. credit unions dropped to $8.22 billion in 2013 from $8.60 billion in 2012, according to SNL data. The credit union community as a whole grew assets an aggregate 3.91% and grew loans and leases an aggregate 7.90% in 2013.
The 50 largest U.S. credit unions grew assets a median 3.29% and grew loans and leases a median 7.65%. Shares and deposits increased a median 3.53% at the top 50 and an aggregate 3.65% across all credit unions.
"As credit unions look for growth," wrote report authors Hina Nawaz and J. Daniel Young, "they also must contend with new regulations related to stress testing and capital, and continued fallout from the Dodd-Frank Act."
Nawaz and Young interviewed representatives of the four credit unions with more than $10 billion in assets, which potentially would be required to initiate annual stress tests similar to those applied to large banks.
The $55 billion Navy Federal told SNL the CU is monitoring the progress of the NCUA's stress testing proposal, while $27 billion SECU said it already is performing stress tests based on Federal Reserve standards.
New regulations also are impacting credit unions with less than $10 billion in assets, the report noted.
In January, NCUA proposed a
Despite NCUA's assurances that 94% of credit unions would still be considered "well-capitalized" under the proposed formula, SNL noted others are not convinced.
The firm cited a NAFCU analysis that estimated CUs with assets between $50 million and $100 million will need to hold a total of $192 million more in additional reserves, while institutions with assets between $500 million and $1 billion will need to hold a total of $1.28 billion more in additional reserves. Credit unions with more than $1 billion in assets would need to hold an additional $3.47 billion.
The total additional reserves would be $6.3 billion, according to NAFCU estimates. SNL said credit unions fear their inability to raise capital will result in having to pass on the cost of increased reserves to members.
