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Farm-to-Table Gleaning Operation Provides Major Boost to New Record Donation

ALEXANDRIA, Va. (Nov. 13, 2015) – More than 128,000 meals will be served in the coming year with food donated by staff of the National Credit Union Administration to the annual Feds Feed Families food drive.

Agency employees donated 153,752 pounds of food during the 2015 drive, a 65 percent increase from the previous year. A major contributor to the success of this year’s food drive was a gleaning operation led by Terri Finley-Harrigan, of the Office of Public and Congressional Affairs, and Angela Sanders, of the Board Chairman’s office, that yielded 103,300 pounds of food. Finley-Harrigan and Sanders collected food from warehouses and direct from farms.

“These tremendous results happen because of the dedication, teamwork, creativity and enthusiasm of NCUA staff.” NCUA Board Chairman Debbie Matz said. “It’s wonderful that NCUA’s contribution grew so strongly, but the important point is that thousands of people will have meals they might well have missed. Every contribution, no matter the size, makes life a little easier for people in need.”

NCUA’s 2015 donation is the equivalent of the take-off weight of a Boeing 737, two adult humpback whales, 44 Toyota Camrys, 2,795 English bulldogs or 20,501 average newborns.

Donations from agency’s Central Office employees went to the Capital Area Food Bank (opens new window). Through direct delivery and partnership with nearly 470 community organizations, the food bank serves more than 540,000 people annually. Donations included fresh food, whole-grain foods, canned fruits and vegetables, soups and stews, baking goods and baby food. Food banks around the country benefited from contributions by the agency’s regional offices.

Sixty NCUA employees entered the Feds Feed Families Hall of Fame this year with individual donations of 250 pounds or more. Fourteen employees reached the Platinum level (1,000 pounds or more). Twenty-eight reached the Gold level (500 to 999 pounds). Eighteen reached the Silver level (250 to 499 pounds).

NCUA’s Region V office, in Tempe, Arizona, again led the agency by contributing 18,378 pounds of food. The largest contribution in the agency’s Central Office came from the Office of Public and Congressional Affairs, with 3,537 pounds of food donated.

The seventh annual Feds Feed Families food drive ran from July 15 to Oct. 2. Federal workers donated more than 17 million pounds of food and other non-perishable items to support families in need across America. The donations from the Feds Feed Families food drive are especially important, because they come at a time of year when donations traditionally decline.

ALEXANDRIA, Va. (Nov. 16, 2015) – The National Credit Union Administration announced today the November 2015 issue of The NCUA Report is now available online (opens new window).

This latest issue includes columns from NCUA Board Chairman Debbie Matz, Vice Chairman Rick Metsger and Board Member J. Mark McWatters. Additionally, it contains articles from several NCUA offices on the agency’s initiatives and information on supervisory, regulatory and compliance issues that are important to all federally insured credit unions.

The articles in this month’s edition include:

• Targeted Risk-Based Capital Rule Will Better Protect Credit Unions
• Chairman’s Corner: Risk-Based Capital: The Final Chapter
• Vice Chairman Metsger’s Perspective: A Funny Thing Happened on the Way to the Forum
• Board Member McWatters’ Perspective: A New Approach to Credit Union Regulation
• Board Actions: Revisions to Delegations of Authority Will Streamline Community Charter Changes
• Remembering Hurricane Katrina Brings Home the Need for Preparedness
• Risks in the Shadows: Understanding NCUA’s Need for Vendor Authority—Part 2
• Understanding the New Process for Handling Consumer Complaints
• Making the Business Case for Diversity
• NCUA Opens Nominations for First 2016 Consulting Round
• New Video Helps Credit Unions Use the FFIEC’s Cybersecurity Assessment Tool
• Talk to Your Members about Their Financial Security during Open Enrollment

Published monthly, The NCUA Report is NCUA’s flagship publication. The newsletter highlights important Board actions and key issues that credit union managers, staff and volunteers need to know. Interested readers can subscribe to the online version of the newsletter here (opens new window). For previous issues of The NCUA Report, go to http://go.usa.gov/cghah. (opens new window)

Board Action Bulletin

Two-Year NCUA Budget Approved with Smallest Percentage Increase Since 2007

ALEXANDRIA, Va. (Nov. 19, 2015) – The National Credit Union Administration Board convened its tenth open meeting of 2015 at the agency’s headquarters here today and approved five items:

• A proposed rule to modernize field-of-membership requirements for federal credit unions, cut regulatory red tape and increase consumers’ access to affordable financial services.
• An Operating Budget increase of 4.1 percent for each of the next two years—the smallest increase since 2007—to fund the agency’s critical activities and address strategic priorities.
• The 2016–2017 Annual Performance Plan to establish NCUA’s goals for the coming year.
• A delegation to the Office of Examination and Insurance to administer the Board-approved methodology for calculating the Overhead Transfer Rate, which will be 73.1 percent in 2016.
• A delegation to the Office of the Chief Financial Officer to administer the Board-approved methodology for calculating the federal credit union Operating Fee, which will be 0.47 percent in 2016.

The Chief Financial Officer also briefed the Board on the performance of the Temporary Corporate Credit Union Stabilization Fund, based on the best available preliminary and unaudited information. The Corporate Stabilization Fund remained in a positive net position.

The Chief Financial Officer said the agency does not plan a Share Insurance Premium for 2015 or a Corporate Stabilization Fund assessment for 2016. The range for a potential Share Insurance Fund premium for 2016 will be 0 to 6 basis points.

NCUA Board Proposes Sweeping Field-of-Membership Reform
Millions of Americans who need affordable financial services would be eligible for credit union membership under a proposed field-of-membership modernization rule (Part 701) unanimously approved by the NCUA Board.

“There is nothing more vital to the future of a credit union than the ability to attract new members,” Board Chairman Debbie Matz said. “Our vision is to enable federal credit unions to reach potential members from all walks of life. With this proposed rule, we would expand consumer choice, increase access to affordable financial services and provide regulatory relief to a wide range of federal credit unions. At the same time, we will keep the federal charter competitive with state charters that allow more permissive field-of-membership rules.”

Consistent with the limitations outlined in the Federal Credit Union Act, the proposed rule would amend NCUA’s chartering and field-of-membership rule by:

• Modernizing the definition of “multiple common bond” to streamline the process for adding new groups to a charter;
• Enlarging the pool of potential members by expanding the areas that may be served by a community charter;
• Updating the process of defining an “underserved area;”
• Revising the “rural district” definition to include populations of up to 1 million people; and
• Expanding the definition of a “trade, industry or profession” as a single common bond.

Matz said the proposed rule was in large part the result of work by the Field-of-Membership Working Group she appointed in December 2014. NCUA Board Vice Chairman Rick Metsger had previously called on the agency to reform its field-of-membership rules.

“I would like to express our sincere gratitude to everyone who participated on calls with the NCUA Working Group,” Matz said. “Over the last 11 months, staff heard from hundreds of stakeholders from every region in the country. As a result, this proposal includes creative ideas, and we look forward to more input during the comment period.”

Comments on the proposed rule, available online
here (opens new window), must be received within 60 days of publication in the
Federal Register. A comparison chart showing the proposed changes to the existing rule is available
here. (opens new window)

Agency Budget Growth Slowest in Nine Years
Cost savings of nearly $7 million held increases in the agency’s Operating Budget, approved by a 2–1 NCUA Board vote, to 4.1 percent, the slowest growth since 2007.

NCUA’s Operating Budget will be $290.9 million for 2016 and $302.9 million for 2017. The 2016 Operating Budget reduces staffing levels by 21.7 full-time equivalents, with the reductions achieved through attrition, saving approximately $4.3 million. Authorized staffing in 2016 and 2017 is 1,247 full-time equivalents.

“As a result of an all-inclusive, zero-based budget process, the Operating Budget increase of 4.1 percent will be the lowest in nine years,” Matz said. “We’ve achieved cost savings of nearly $7 million in the 2016 budget alone without sacrificing NCUA’s statutory mission to protect the National Credit Union Share Insurance Fund.

“This Operating Budget will ensure NCUA continues to move forward as we supervise a rapidly growing and rapidly changing credit union system that exceeds $1.1 trillion in assets,” Matz said. “The budget presented today demonstrates our intent to hold the line on budget growth and staffing into 2017 and act transparently throughout the two-year budget cycle.”

All budget requests reflect NCUA’s top priorities, including maintaining a strong supervisory system, strengthening security, promoting greater awareness of critical risks and related threats, providing credit unions with guidance and supporting consumer protection and financial literacy.

Detailed information about NCUA’s budget, including office budgets and fact sheets, is available online at the agency’s
Budget Resource Center.

The two-year budget is a return to the Board’s former practice. During the financial crisis, the NCUA Board approved budgets on an annual cycle. The budget estimates for 2017 represent the agency’s current best estimates of operating costs for that year. The Board plans to continue its practice of holding a mid-year budget review, and the 2017 budget is scheduled to be reviewed at the Board’s November 2016 open meeting.

As part of the vote on the Operating Budget, the Board also approved a two-year Corporate Stabilization Fund Budget. The 2016 Corporate Stabilization Fund budget of $4.0 million decreases spending by 2.4 percent, and the 2017 budget will be $4.1 million. Staffing levels for the Corporate Stabilization Fund will stay flat for both years at five full-time equivalents.

Annual Performance Plan Guides NCUA’s Work
In a split vote, the NCUA Board approved the 2016–2017 Annual Performance Plan, which provides specific direction for achieving the agency’s mission and strategic goals contained in the agency’s 2014–2017 Strategic Plan.

The Annual Performance Plan highlights goals, indicators and targets to measure agency performance. NCUA continues to designate the following goals as priorities:

• Implement a robust supervision framework for new financial reform regulations, including liquidity and contingency funding plans, capital planning and stress testing, derivatives authority and interest rate risk.
• Issue industry guidance related to emerging risks and related threats, like cybersecurity.
• Monitor issues or trends in consumer complaints to develop and promote financial literacy education and consumer protection programs.
• Develop and communicate guidance to credit unions to explain regulatory changes and best practices.
• Increase women and minority representation at all levels within the agency’s workforce, particularly within NCUA’s management ranks.
• Strengthen security programs and communications.

Copies of the agency’s Annual Performance Plan, as well as the multi-year Strategic Plan and public comments, can be found online
here.

Overhead Transfer Rate Set at 73.1 Percent
The NCUA Board voted 2–1 to approve a delegation of authority to the Office of Examination and Insurance to administer the Board-approved methodology for calculating the Overhead Transfer Rate and set that rate for each budget cycle, beginning in 2016.

The Overhead Transfer Rate for 2016 will be 73.1 percent.

The Overhead Transfer from the Share Insurance Fund covers expenses associated with NCUA’s insurance-related activities. It is calculated annually through a methodology adopted by the Board in 2003. For 2015, the rate was 71.8 percent. The primary cause for the 1.3 percentage-point increase for 2016 is the increase in the percentage of insured shares held by state-chartered credit unions, which rose 0.9 percentage points to 47.7 percent.

Detailed information about the Overhead Transfer Rate and the methodology used to calculate it is available online on the agency’s
Budget Resource Center.

Chairman Matz said she intends to request Board approval at the January 2016 open meeting to publish the current Overhead Transfer Rate methodology in the
Federal Register. After an agency review of comments received, the Board would determine whether to revise the methodology.

Operating Fee Scale Reduced for Federal Credit Unions
The NCUA Board voted 2–1 to approve a recommendation to delegate authority to the Office of the Chief Financial Officer to administer the Board-approved methodology for calculating federal credit union operating fees and set the fee schedule for each budget cycle, beginning in 2016.

The 2016 Operating Fee will decrease 0.47 percent. NCUA uses the Operating Fee to pay the costs of regulating federal credit unions. NCUA will charge the Operating Fee in March 2016, with payments due April 15, 2016.

Based on the Overhead Transfer and the Operating Fee, federal credit unions will fund 65.1 percent of NCUA’s 2016 Operating Budget, while state-chartered credit unions will fund 34.9 percent.

For the fourth consecutive year, federal credit unions with assets of less than $1 million will be exempt from the fee. In all, 254 federal credit unions are currently eligible for the exemption.

Chairman Matz said she intends to request Board approval at the January 2016 open meeting to publish the current Operating Fee methodology in the
Federal Register. After an agency review of comments received, the Board would determine whether to revise the methodology.

Background information on the Operating Fee is available on the agency’s
Budget Resource Center.

Corporate Stabilization Fund’s Positive Net Position Increases
For the quarter ending Sept. 30, 2015, the Corporate Stabilization Fund’s net position increased by $24.1 million to a positive $499.1 million.

The increase included a $15.5 million reduction in insurance loss expense as a result of continuing improvements in projected cash flows relating to the legacy assets that secure the NCUA Guaranteed Notes. It also included $11.4 million in income from guarantee fees.

“The Corporate Stabilization Fund has now recorded a positive net position for six straight quarters, and that’s a testament to sound management,” Matz said. “We should note that recent legal settlements earned by the agency cannot yet be factored into this report. In the meantime, we can assure credit unions that NCUA will continue to aggressively pursue legal recoveries, and I am confident that we will have more settlements. Those recoveries, along with an improving economy and careful management, have minimized the costs to credit unions, and we don’t foresee a need for any more Corporate Stabilization Fund assessments in the future.”

Created by Congress in 2009 to ease the impact on the credit union system of the cost of resolving the corporate credit union crisis, the Corporate Stabilization Fund is scheduled to expire in 2021.

While the Corporate Stabilization Fund continues to have a positive net position, no funds are available to provide federally insured credit unions with an immediate rebate. NCUA must first repay outstanding borrowings from the U.S. Treasury, which were $2.3 billion at the end of the third quarter. NCUA plans to make a $400 million repayment to Treasury by Dec. 4.

Future changes in the economy or the performance of the legacy assets, which secure the NCUA Guaranteed Notes, are likely to change the value of the assets NCUA and the Corporate Stabilization Fund can eventually access at the end of the Guaranteed Notes Program.

The third-quarter financial results for the Corporate Stabilization Fund are preliminary and unaudited.

NCUA tweets all open Board meetings live. Follow

@TheNCUA (opens new window) on Twitter, and access Board Action Memorandums and NCUA rule changes at

www.ncua.gov. NCUA also live streams, archives and posts

videos of open Board meetings online.

Member Deposits Protected up to $250,000 by Share Insurance Fund

ALEXANDRIA, Va. (Nov. 20, 2015) – The National Credit Union Administration today liquidated Helping Other People Excel Federal Credit Union of Jackson, New Jersey.

Member deposits are federally insured by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund separately protects IRA and KEOGH retirement accounts up to $250,000. The Share Insurance Fund has the backing of the full faith and credit of the United States.

NCUA’s Asset Management and Assistance Center will issue correspondence in the near future to individuals holding verified share accounts in the credit union. Members with additional questions about their insurance coverage may contact the Center toll-free at 877-715-0777 Monday through Friday between 9 a.m. and 6 p.m. Eastern. Individuals may also visit the MyCreditUnion.gov (opens new window)website at any time for more information about insurance coverage.

NCUA placed Helping Other People Excel Federal Credit Union into conservatorship on Oct. 16. The agency made the decision to liquidate the credit union and discontinue operations after determining it was insolvent and had no prospect for restoring viable operations. 

Helping Other People Excel Federal Credit Union served 110 members and had assets of $626,529, according to the credit union’s most recent Call Report. Chartered in 1978, Helping Other People Excel Federal Credit Union served a community field of membership comprised of persons who live, work, worship, or attend school in, and businesses and other legal entities in Lakewood, New Jersey.  

Helping Other People Excel Federal Credit Union is the eighth federally insured credit union liquidation in 2015.

NCUA Risk-Based Capital Rule Report Includes Legislative Recommendations

ALEXANDRIA, Va. (Nov. 23, 2015) – With the National Credit Union Administration’s risk-based capital rule now finalized, credit unions would benefit from changes Congress could make in the Federal Credit Union Act, the agency said.

NCUA today delivered a report (opens new window) to the House Financial Services Committee on the agency’s risk-based capital final rule. As outlined in H.R. 2769, the Risk-Based Capital Study Act of 2015, the report included legislative recommendations to improve the capital system for credit unions. NCUA recommended that Congress allow well-managed credit unions to issue supplemental capital that will count as net worth. NCUA also proposed technical changes to the current prompt corrective action statutory framework.

The 228-page report contains an analysis of the agency’s legal authority to require a two-tiered risk-based capital system, a comparison of credit union and bank risk weights, a discussion of the rationale for each of the risk weights and an overview of how the proposed rule would apply to credit union capital buffers.

NCUA Board Chairman Debbie Matz in October committed to completing the report outlined in H.R. 2769. The House Financial Services Committee passed the bill Sept. 30.

Approved by the NCUA Board at its October 2015 open meeting by a 2-1 vote, the risk-based capital final rule (opens new window) goes into effect Jan. 1, 2019. The final rule was approved after a comprehensive review of thousands of comments by lawmakers and credit union system stakeholders during two separate comment periods. The scope of the new rule covers 24 percent of credit unions—complex credit unions with assets above $100 million—that hold 90 percent of the systems assets.

NCUA hosts an online Risk-Based Capital Rule Resources Center with extensive information about the rule, including a risk-based capital estimator tool for credit unions to assess the rule’s impact on their operations and a video (opens new window) about the final rule.

ALEXANDRIA, Va. (Nov. 24, 2015) – The National Credit Union Administration’s Dec. 1 panel discussion, “Unique Challenges and Opportunities Serving Hispanic Credit Union Members,” will be available over livestream, the agency announced today.

Registration is necessary and available online here (opens new window). Participants will use this same link to log into the livestream, which will begin 15 minutes before the panel discussion starts. The agency will also provide an audio feed in Spanish. There is no charge.

Once registered, participants will received a link they can use to test their systems. Participants with technical questions about accessing the livestream may email [email protected].

The panel discussion will be held at NCUA’s Central Office, 1775 Duke Street, Alexandria, Virginia. The discussion will begin at 2 p.m. Eastern and run approximately 90 minutes.

NCUA has created three videos (opens new window), posted on the agency’s YouTube channel, describing the event and the importance of diversity and inclusion for credit unions.

William Myers, Director of NCUA’s Office of Small Credit Union Initiatives, and a panel of experts will discuss the opportunities credit unions have to better serve Hispanic members, the challenges that accompany those opportunities and strategies for credit unions that want to strengthen outreach to these members. Panelists will be:

• Miriam De Dios, chief executive officer of Coopera, a consulting firm specializing in reaching Hispanic audiences;
• Maria Martinez, president and chief executive officer of Border Federal Credit Union and co-chair of the Network of Latino Credit Unions and Professionals;
• Robert Peterson, president and chief executive officer of One Source Federal Credit Union; and
• Sergio Osuna, a supervisory examiner with NCUA’s Region V office.

A brief question-and-answer period will follow. The panel discussion is organized by NCUA’s Office of Minority and Women Inclusion and the Office of Small Credit Union Initiatives.

Join the Discussion to Learn More about the Financial Condition of People with Disabilities and How Credit Unions Can Help

ALEXANDRIA, Va. (Nov. 24, 2015) – Nearly 20 percent of households headed by a working-age adult with disabilities lack access to traditional financial services, and credit unions seeking to serve this population can get valuable information from an upcoming Twitter chat hosted by the National Credit Union Administration and the National Disability Institute.

The live chat is scheduled for Wednesday, Dec. 2, beginning at 11 a.m. Eastern.

During the chat staff from NCUA’s Office of Consumer Protection will be joined by experts from National Disability Institute, who will share key findings from the group’s 2015 report on the Banking Status and Financial Behaviors of Adults with Disabilities and discuss the role credit unions play in improving the financial well-being of persons with disabilities. NCUA will also share resources from the agency’s consumer website, MyCreditUnion.gov (opens new window).

Credit unions and consumers are encouraged to follow the conversation and contribute using the #NCUAChat (opens new window)hashtag on Twitter. The moderators will answer questions throughout the chat, and participants can submit questions beforehand to [email protected].

ALEXANDRIA, Va. (Nov. 30, 2015) – Credit union members will have an easier time understanding how their accounts at federally insured credit unions are protected as a result of three new videos released today by the National Credit Union Administration.

Available on NCUA’s YouTube Channel (opens new window), the three videos are part of NCUA’s Consumer Report series developed by the Office of Consumer Protection. The videos include a Share Insurance Coverage Overview (opens new window), How to Use NCUA’s Share Insurance Estimator (opens new window)and Account Ownership Types (opens new window).

“These videos are excellent tools to educate depositors about the protection offered by the National Credit Union Share Insurance Fund,” NCUA Board Chairman Debbie Matz said. “Federally insured credit unions are a very safe place to save. No member of a federally insured credit union has ever lost a penny of shares insured by NCUA. I urge credit unions to make their members aware of these videos or to download them and share them on their own websites.”

The videos are also housed on NCUA’s new Share Insurance Toolkit for Consumers (opens new window)located on MyCreditUnion.gov (opens new window).  The toolkit provides a variety of helpful resources for consumers to better understand insurance coverage on their deposits at federally insured credit unions, including:

• The Share Insurance Estimator (opens new window), NCUA’s interactive site which allows users to input data to compute the amount of Share Insurance Fund coverage available under different account scenarios, and
• NCUA’s share insurance publications How Your Accounts Are Federally Insured (opens new window)and Your Insured Funds (opens new window). Both publications are available in English and Spanish.

Federally insured credit unions interested in using these resources to promote awareness of federal share insurance coverage can embed the links on their websites for viewing by members.

NCUA supports credit unions and their members with free financial literacy and consumer protection resources available at MyCreditUnion.gov (opens new window). NCUA also provides up-to-date financial education information on the agency’s YouTube (opens new window), Facebook (opens new window) and consumer Twitter (opens new window)feeds.

Member Deposits Protected up to $250,000 by Share Insurance Fund

ALEXANDRIA, Va. (Dec. 1, 2015) – The National Credit Union Administration today liquidated Greater Abyssinia Federal Credit Union of Cleveland, Ohio.

NCUA made the decision to liquidate Greater Abyssinia Federal Credit Union and discontinue operations after determining the credit union was insolvent and had no prospect for restoring viable operations.

Member deposits are federally insured by the National Credit Union Share Insurance Fund.  Administered by NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund separately protects IRA and KEOGH retirement accounts up to $250,000. The Share Insurance Fund has the backing of the full faith and credit of the United States.

NCUA’s Asset Management and Assistance Center will issue correspondence in the near future to individuals holding verified share accounts in the credit union. Members with additional questions about their insurance coverage may contact the Center toll-free at 877-715-0777 Monday through Friday between 9 a.m. and 6 p.m. Eastern. Individuals may also visit the MyCreditUnion.gov (opens new window) website at any time for more information about insurance coverage.

Greater Abyssinia Federal Credit Union served 425 members and had assets of $412,775, according to the credit union’s most recent Call Report. Chartered in 1959, Greater Abyssinia Federal Credit Union served members of the Greater Abyssinia Baptist Church and their immediate family members.

Greater Abyssinia Federal Credit Union is the ninth federally insured credit union liquidation in 2015.

Loans Up Nearly 11 Percent from Previous Year; Larger Credit Unions Lead Growth

ALEXANDRIA, Va. (Dec. 4, 2015) – America’s federally insured credit unions continued to expand lending and reduce longer-term investments in the third quarter of 2015, the National Credit Union Administration reported today.

“Lending continues to grow, which goes hand-in-hand with the continuing economic recovery,” NCUA Board Chairman Debbie Matz said. “The level of exposure to long-term investments that causes concern about interest-rate risk is declining, although there is still room for improvement. Overall, the third-quarter data indicate the credit union system maintains its soundness while fulfilling its primary mission of providing affordable credit.”

NCUA released the new figures today based on Call Report data submitted to and compiled by the agency for the quarter ending Sept. 30, 2015.

Third Quarter Lending Continues Growth Trend 

Total loans at federally insured credit unions reached $769.5 billion in the third quarter of 2015, an increase of 3.3 percent from the previous quarter and 10.7 percent from a year earlier.

Over the year ending in the third quarter of 2015, loans grew across all asset sizes and in every major category, including:

The loans-to-shares ratio at the end of the third quarter was 77.5 percent, up 2.0 percentage points from the previous quarter and up 3.5 percentage points from the end of the third quarter of 2014.

Membership Exceeds 102 Million, Consolidation Trends Continue

Membership in federally insured credit unions grew to 102,138,141 at the end of the third quarter of 2015, an increase of 3.4 million from the end of the third quarter of 2014.

The number of federally insured credit unions fell to 6,090 at the end of the third quarter, 260 fewer than at the end of the third quarter of 2014, a decline of 4.1 percent. Consolidation in the financial industry has been a long-running trend.

Credit Union System Further Reduces Long-Term Investments

Total investments by federally insured credit unions stood at $270.3 billion at the end of the third quarter, a decline of $18.2 billion, or 6.3 percent, from the end of the third quarter of 2014. Compared to a year earlier, investments declined in all duration categories except those with maturities between one and three years. Investments with maturities of one to three years increased 9.5 percent from a year earlier, to $105.4 billion. Investments with maturities greater than 10 years dropped 25.2 percent from the third quarter of 2014, to $4.5 billion.

The credit union system’s net long-term assets ratio fell to 32.4 percent in the third quarter from 35.0 percent a year ago. Credit unions with less than $10 million in assets had the lowest net long-term asset ratio of any peer group at 11.0 percent. In comparison, credit unions with more than $500 million in assets had a ratio of 33.4 percent.

Credit Unions Report 23 Consecutive Quarters of Positive Net Income

Federally insured credit unions continued to report positive net income in the third quarter, $2.3 billion, a decline of $82 million, or 3.5 percent, from the third quarter of 2014. As a whole, federally insured credit unions have recorded positive net income for 23 straight quarters.

This ongoing trend contributed to a rise in the system’s total net worth. The aggregate net worth ratio reached 10.99 percent at the end of the third quarter, up 6 basis points from a year earlier.

Delinquencies Rise Slightly From Previous Quarter

The delinquency rate at federally insured credit unions rose slightly in the third quarter, to 78 basis points, up from 74 basis points the previous quarter, but still below the 85 basis-point level in the third quarter of 2014. The net charge-off ratio was an annualized 46 basis points year-to-date, down from 48 basis points through the end of the third quarter of 2014. 

The percentage of year-to-date loan charge-offs due to bankruptcy in the third quarter was 17.2, 247 basis points below the end of the third quarter of 2014.

Return on Average Assets at 80 Basis Points

Federally insured credit unions’ year-to-date return on average assets ratio stood at an annualized 80 basis points at the end of the third quarter, slightly below the level in the third quarter of 2014.

Overall, 78 percent of federally insured credit unions reported positive returns on average assets for the first three quarters of 2015, compared to 76 percent in the first three quarters of 2014.

Percentage of Well-Capitalized Credit Unions Rises

The percentage of federally insured credit unions that were well-capitalized rose in the third quarter, with 98.0 percent reporting a net worth ratio at or above the statutorily required 7.0 percent. A year earlier, 97.5 percent of credit unions were well-capitalized. As of Sept. 30, 2015, less than one percent of federally insured credit unions were undercapitalized.

Growth Trends in Assets and Shares Continue

Total assets in federally insured credit unions rose to $1.18 trillion at the end of the third quarter of 2015, an increase of $72.6 billion, or 6.6 percent, from the end of the third quarter of 2014.

Overall, share and deposit accounts at federally insured credit unions increased $53.3 billion from the end of the third quarter of 2014 to $992.5 billion. Rate-sensitive money market accounts rose by $9.8 billion from the third quarter of 2014. 

Larger Credit Unions Continue Reporting Highest Growth

Federally insured credit unions with more than $500 million in assets continued to lead growth in the system in most performance measures in the third quarter of 2015. With $841.6 billion in combined assets, these 468 credit unions continued to hold more than seven out of ten dollars of total system assets at the end of the quarter. Large credit unions also reported the strongest growth in loans and membership and the highest return on average assets.

Credit unions with assets of less than $10 million recorded positive loan and net worth growth and a higher net worth ratio than other peer groups, but membership continued to decline.

The table below provides a summary of federally insured credit unions’ current ratios and growth during the first three quarters of 2015 by asset size for selected metrics: