NEW YORK The credit union movement has apparently recovered from the worst recession in 75 years, but thousands of small credit unions are continually being left behind, with negative growth and negligible or non-existent profitability, CUNA economists explained during America’s CU Conference this afternoon.
While the industry as a whole reported booming membership growth of around 2.2% for the previous 12 months, all of that growth appears to have been among the nation’s biggest credit unions.
Data compiled by CUNA shows that for the past 12 months credit unions over $100 million in assets had an average 3.6% membership growth; those between $20 million and $100 million had 1% membership growth. But those between $5 million and $20 million had negative growth of 0.9% and those under $5 million had negative 1.6% membership growth.
“We talk about tremendous membership growth, over all, but smaller institutions are not seeing the same membership growth,” said Mike Schenk, senior economist for CUNA, to about 300 attendees to one of the ACUC’s break-out sessions.
Similar trends have emerged for both loan and savings growth and for asset quality, most notably loan charge-offs, according to Schenk, with credit unions under $20 million in assets reporting far lower growth rates, even as the economy has rebounded from the recession, and is considered recovered.
As a result, smaller credit unions are lagging far behind in profitability, too.
While the industry earned an average of 83 basis points for the past 12 months, credit unions under $5 million were at negative 33 bps; those from $5 million to $20 million were at negative 3 bps; and all of the industry’s $8 billion in net income came from credit unions $20 million and over.
