Matz Outlines Issues Of Concern

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Speaking to the National Association of State Credit Union Supervisors (NASCUS) meeting here, NCUA Board Member Debbie Matz called for federal/state cooperation on strengthening credit unions, and also outlined several trends over which she is concerned.

Among the issues raised by Matz:

"Credit unions are not increasing the ethnic diversity or the age diversity of their members. America's fastest-growing ethnic groups are under-represented in credit union memberships, and more than half of adult members have aged beyond their prime borrowing years. With membership growth slowing and only 5% of adult members entering prime borrowing years, there are very few young members to sustain credit unions in the future."

* "Stagnant membership growth is causing thousands of credit unions to shrink. More than one-third of all credit unions are losing shares; more than one-third of all credit unions are losing loans; nearly half of all credit unions are losing assets. And all credit unions' return on assets is the lowest in 10 years. Most individual credit unions-including the vast majority of small and mid-sized credit unions-are either shrinking or limping along with growth in the low single digits."

* "Regulatory initiatives to increase potential membership are a good start, but not enough. Credit unions now have greater potential than ever to grow membership. But while larger fields of membership open the door to new members, they don't guarantee it. Many credit unions are finding it very labor-intensive and time-consuming to reach out to entire communities or underserved areas. Regulators and examiners can be very helpful by carefully examining the Business Plan when each application is reviewed, making suggestions on successful outreach strategies, and preparing each credit union for the enormity of the task so they don't get discouraged."

"While many credit unions are struggling to serve everyone in their fields of membership, small credit unions are struggling to survive. Each year, we're losing more small credit unions through mergers and liquidations. Last year, 288 went out of business-over 6% of small credit unions.

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For text of Matz' remarks:

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