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NCUA Quarterly Data Indicate Less Exposure to Long-Term Investments

ALEXANDRIA, Va. (March 3, 2016) – Total shares and deposits at federally insured credit unions grew past $1 trillion in the fourth quarter of 2015, the National Credit Union Administration reported today.

Overall, share and deposit accounts at federally insured credit unions increased $65.2 billion, or 6.9 percent, from the end of the fourth quarter of 2014.

“Year-end data show the credit union system remains sound and focused on providing affordable financial services,” NCUA Board Chairman Debbie Matz said. “Rising deposits indicate consumer confidence in the system, and credit unions are turning those deposits into loans that allow members to buy homes, cars and other goods. New loans also grew by 15.8 percent in 2015. As lending increased, credit unions’ exposure to long-term investments declined. Nevertheless, NCUA will continue to closely examine credit unions for interest rate risk.”

NCUA released the new figures today based on Call Report data submitted to and compiled by the agency for the quarter ending Dec. 31, 2015. With the release of the latest statistics, the agency also debuted an expanded quarterly summary to provide easy access to more detailed information about the performance of federally insured credit unions.

Asset Growth Continues Alongside Deposit Growth

Total assets in federally insured credit unions rose to $1.2 trillion at the end of the fourth quarter of 2015, an increase of $82.2 billion, or 7.3 percent, from the end of 2014. As overall deposits rose, growth in share drafts was especially strong, increasing by 14.5 percent for the year.

Auto, Mortgage and Member-Business Lending Continue Growth 

Total loans at federally insured credit unions reached $787 billion in the fourth quarter of 2015, an increase of 2.3 percent from the previous quarter and 10.5 percent from a year earlier.

For the year ending in the fourth quarter of 2015, loans grew in every major category, including:

• New auto loans grew to $100.1 billion, up 3.4 percent for the quarter and up 16.0 percent for the year.
• Used auto loans rose to $161.9 billion, up 2.1 percent for the quarter and up 12.7 for the year.
• Total first-mortgage loans outstanding reached $322.3 billion, up 2.1 percent for the quarter and up 10.3 percent for the year. Fixed-rate first mortgages made up 59 percent of first-mortgage loans at year’s end.
• Other mortgage loans stood at $74.4 billion, up 1.4 percent for the quarter and up 3.6 percent for the year.
• Net member-business loan balances grew to $58.1 billion, up 3.6 percent for the quarter and up 12.2 percent for the year.
• Non-federally guaranteed student loans stood at $3.5 billion, up 2.1 percent for the quarter and up 11.3 percent for the year.

Federal credit unions also originated $123.3 million in payday alternative loans over the four quarters ending in the fourth quarter of 2015, up 7.2 percent from the fourth quarter of 2014.

The loans-to-shares ratio at the end of the fourth quarter was 77.5 percent, unchanged from the previous quarter and up 2.5 percentage points from the end of the fourth quarter of 2014.

Credit Union System Further Reduces Long-Term Investments

Total investments by federally insured credit unions stood at $272.8 billion at the end of the fourth quarter of 2015, a decrease of $3 billion, or 1.1 percent, from the end of 2014. Compared to a year earlier, investments with maturities greater than 10 years declined 20.6 percent to $4.5 billion. Investments with maturities of one to three years increased to $101.7 billion, up 2.2 percent from a year earlier.

The credit union system’s net long-term assets ratio was 32.7 percent in the fourth quarter, compared to 33.6 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 10.5 percent. In comparison, credit unions with more than $500 million in assets had a ratio of 34 percent.

Percentage of Well-Capitalized Credit Unions Rises

The percentage of federally insured credit unions that were well-capitalized rose over the past four quarters with 97.9 percent reporting a net worth ratio at or above the statutorily required 7 percent. A year earlier, 97.6 percent of credit unions were well-capitalized. As of Dec. 31, 2015, 0.6 percent of federally insured credit unions were undercapitalized.

Credit Unions Add 3.5 Million Members, but Consolidation Continues

Membership in federally insured credit unions grew to 102.7 million at the end of 2015, an increase of 3.5 million from the end of the fourth quarter of 2014.

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

ALEXANDRIA, Va. (March 4, 2016) – The National Credit Union Administration today liquidated Education Associations Federal Credit Union of Washington, D.C.

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 members holding verified share accounts at 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. Members may also visit the Share Insurance section (opens new window)of NCUA’s MyCreditUnion.gov (opens new window) website at any time for more information about their insurance coverage.

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

Education Associations Federal Credit Union served 665 members and had assets of $2,596,701, according to the credit union’s most recent Call Report. Chartered in 1954, Education Associations Federal Credit Union served the employees of the National Education Association, other national education organizations and their immediate family members.

Education Associations Federal Credit Union is the third federally insured credit union liquidation in 2016.

ALEXANDRIA, Virginia (7 Marzo, 2016) – Miembros de habla hispana dentro de los comités de supervisión en las cooperativas de crédito encontrarán información de gran valor en este video que les ayudará a ser más exitosos. Este video, el cual forma parte de una serie de capacitación, ha sido traducido del inglés al español y está diseñado específicamente para los miembros del comité de supervisión de las pequeñas y medianas cooperativas de crédito.

La serie de videos está disponible aqui (opens new window).

La Oficina de Iniciativas de Pequeñas Cooperativas de Crédito creó diferentes módulos de 10 minutos de duración o menos, los cuales tocan temas como actividades de monitoreo, auditorías anuales, verificación de cuentas de usuario y manejo de quejas de los miembros. Decidimos traducir los módulos del comité de supervisión del inglés al español para responder a las peticiones de las cooperativas de crédito y para el beneficio de aquellos miembros de habla hispana dentro de los comités de supervisión en las cooperativas de crédito.

La Oficina de Iniciativas para Pequeñas Cooperativas de Crédito fomenta el desarrollo de las cooperativas de crédito y la prestación eficaz de servicios financieros para las cooperativas de crédito pequeñas, las cooperativas de crédito nuevas, las instituciones depositarias de las minorías y las cooperativas de crédito denominadas de bajos ingresos.

ALEXANDRIA, Va. (March 7, 2016) – The National Credit Union Administration’s video series on Supervisory Committees is now available in Spanish.

Available online here (opens new window), the six-module video series is designed specifically for supervisory committee members of small and medium credit unions.

The Office of Small Credit Union Initiatives created different modules, all 10 minutes in length or less, that address topics as monitoring management activities, annual audits, verification of member accounts and handling member complaints. NCUA is offering the Spanish translations in response to requests from credit unions that have Spanish-speaking supervisory committee members.

NCUA’s Office of Small Credit Union Initiatives fosters credit union development and the effective delivery of financial services for small credit unions, new credit unions, minority depository institutions and credit unions with a low-income designation.

For Immediate Release

March 9, 2016

The Federal Financial Institutions Examination Council (Council) announced today the appointment of Tennessee Commissioner Greg Gonzales to the Council’s State Liaison Committee. Gonzales’s SLC nomination was confirmed by the Conference of State Bank Supervisors on Feb. 26, 2016, to complete a partial term vacancy created by the resignation of Lauren Kingry.  Gonzales’s term will continue through March 31, 2017.

Greg Gonzales is the 18th commissioner of the Tennessee Department of Financial Institutions.  He began serving in this role in 2005 and was reappointed by Governor Bill Haslam. He has served in the department since 1986. In this position, Gonzales serves as Tennessee’s chief regulatory officer of all state-chartered depository and licensed non-depository financial institutions.  Additionally, he has served as assistant commissioner and general counsel for the department.

Gonzales is a past Chairman of CSBS, served as a member of the Board of Directors of the Money Transmitter Regulators Association, and served on the U.S. Treasury’s Bank Secrecy Act Advisory Group. Commissioner Gonzales currently serves on both the Board of Directors of the Tennessee Financial Literacy Commission and a national task force studying how new technologies are affecting the U.S. payment systems.

Gonzales joins the current four members of the SLC who are:

• SLC Chairman David Cotney, Commissioner of Banks for the Commonwealth of Massachusetts, confirmed by the Council;
• Mary Hughes, Financial Institutions Bureau Chief of the Idaho Department of Finance, appointed by the National Association of State Credit Union Supervisors (NASCUS);
• Caroline Jones, Commissioner of the Texas Department of Savings and Mortgage Lending, appointed by the American Council of State Savings Supervisors (ACSSS); and
• Karen Lawson, Director, Office of Banking within the Michigan Department of Insurance and Financial Services, confirmed by the Council.

The FFIEC was created by the Federal Financial Institutions Regulatory and Interest Rate Control Act of 1978 to prescribe uniform principles, standards and report forms for the federal examination of financial institutions, and to make recommendations to promote uniformity in the supervision of financial institutions. It also conducts schools for examiners employed by the five federal member agencies represented on the FFIEC and makes those schools available to employees of state agencies that supervise financial institutions.

The FFIEC currently consists of the following six voting members: the Comptroller of the Currency, Office of Comptroller of the Currency; a member of the Board of Governors of the Federal Reserve System (Board), appointed by the Chairman of the Board; Chairman of the Federal Deposit Insurance Corporation; Director of the Consumer Financial Protection Bureau; Chairman of the National Credit Union Administration; and the Chairman of the SLC.

The SLC consists of five representatives of state banking agencies that supervise financial institutions and members are designated from the CSBS, ACSSS, NASCUS, and the Council.

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Median Asset Growth Rate Higher; Median Delinquency Rate Declines Slightly

ALEXANDRIA, Va. (March 11, 2016) – Median growth rates for loans, assets, and shares and deposits at federally insured credit unions were positive in all states in 2015, according to state-level data compiled by the National Credit Union Administration and released today.

Nationally, median loan growth in federally insured credit unions was 4.0 percent during the year ending in the fourth quarter of 2015. Median asset growth was 3.3 percent, while median growth in shares and deposits was 3.6 percent. The median loan-to-share ratio was 62 percent, up slightly from a year earlier. The median total delinquency rate declined to 0.8 percent from 0.9 percent a year earlier.

The NCUA Quarterly U.S. Map Review, available online here, tracks credit union performance indicators in the 50 states and the District of Columbia. The review also includes information on two key state-level economic indicators: unemployment rates and home price changes.

Median Loan Growth Again Positive in Every State; Washington, Alaska Highest

Nationally, median growth in loans outstanding was 4.0 percent during 2015, up from 3.8 percent in 2014. The highest median growth rates for loans were in Washington (9.0 percent) and Alaska (8.0 percent). Median loan growth was slowest in Arkansas (0.1 percent) and Pennsylvania (0.7 percent).

Utah, North Dakota Pace Nation on Aggregate Returns on Average Assets

Nationally, the aggregate return on average assets at federally insured credit unions was 75 basis points during 2015, down from 80 basis points over the previous year. The aggregate return on average assets was positive in every state during 2015. Utah (134 basis points) had the highest aggregate return, followed by North Dakota (109 basis points). New Jersey (21 basis points) and Connecticut (30 basis points) posted the lowest aggregate returns on average assets.

Median Asset Growth Rate 3.3 Percent with New Hampshire, Idaho Highest

Median asset growth was 3.3 percent nationally in the year ending in the fourth quarter of 2015, up from 2.0 percent a year earlier. Median asset growth was highest in New Hampshire (7.1 percent) and Idaho (7.0 percent). Median asset growth was slowest in New Jersey (0.7 percent) and Delaware (1.2 percent).

Median Shares and Deposits Growth Rate Increases; Idaho, New Hampshire Lead

Nationally, federally insured credit unions’ median growth rate in shares and deposits was 3.6 percent in the year ending in the fourth quarter of 2015, up from 1.8 percent during the previous year.

At the median, shares and deposits rose in each state over the year ending in the fourth quarter of 2015. The median growth rate in shares and deposits was highest in Idaho (7.5 percent) and New Hampshire (7.1 percent). The growth rate in shares and deposits was lowest in New Jersey (0.5 percent) and Delaware (1.2 percent).

Idaho, Alaska Report Highest Median Loan-to-Share Ratios

Nationally, the median ratio of loans outstanding to total shares and deposits was 62 percent at the end of the fourth quarter of 2015, compared to 61 percent at the end of the fourth quarter of 2014. The median loan-to-share ratio was highest among credit unions in Idaho (88 percent) and Alaska (83 percent). The median loan-to-share ratio was lowest in Hawaii (43 percent) and Delaware (45 percent).

Median Total Delinquency Rate Lower than 2014

The median total delinquency rate at federally insured credit unions was 0.8 percent nationally in the fourth quarter of 2015, down from 0.9 percent a year earlier. At the end of the fourth quarter, the median delinquency rate was lowest in North and South Dakota (both 0.4 percent). New Jersey (1.6 percent) reported the highest median delinquency rate, followed by Delaware and the District of Columbia (both 1.5 percent).

Membership Growth Trends Continue

Overall membership in credit unions continued to grow, although membership growth remained concentrated in larger credit unions. The median rate of growth was negative 0.2 percent. In the year ending in the fourth quarter of 2014, the median growth rate was negative 0.3 percent.

Nationally, 52 percent of federally insured credit unions had fewer members than a year earlier. Membership is generally falling at smaller credit unions. About 75 percent of credit unions that lost membership had less than $50 million in assets.

Alaska (3.9 percent) had the highest median membership growth rate, followed by Idaho and Maine (both 1.9 percent). Median membership growth was negative in 20 states, with Pennsylvania (-2.1 percent) ranking lowest.

Successful Lending Requires Right People, Processes and Policies

ALEXANDRIA, Va. (March 14, 2016) – Credit unions can learn more about the advantages of member business lending in a video released today by the National Credit Union Administration.

The video, available here (opens new window), outlines the elements of an effective member business lending program. The video also highlights how member business lending, if managed correctly, could benefit credit unions, their members and their communities. A key factor in successful lending is having the right people, processes and policies in place to ensure safety and soundness.

Credit unions will have greater latitude to make commercial lending decisions under a member business lending final rule (opens new window)unanimously approved by the NCUA Board at its February open meeting. The final rule permits credit unions to tailor their member business lending programs to fit their strategic goals and their members’ needs. Key changes in the final rule include:

• Giving credit union loan officers the ability, under certain circumstances, to not require a personal guarantee;
• Replacing explicit loan-to-value limits with the principle of appropriate collateral and eliminating the need for a waiver;
• Lifting limits on construction and development loans;
• Exempting credit unions with assets under $250 million and small commercial loan portfolios from certain requirements; and
• Affirming that non-member loan participations do not count against the statutory member-business lending cap.

Most of the provisions of the final rule become effective Jan. 1, 2017. Removal of the personal guarantee requirement is effective 60 days after publication in the Federal Register. (opens new window)

At any time, credit unions may access NCUA’s Small Business Lending Resource page for detailed information about the agency’s member business lending rules and regulations, supervisory guidance, links to the Small Business Administration’s loan programs and related articles from The NCUA Report, the agency’s flagship publication.

Registration for March 30 Event Now Open Online

ALEXANDRIA, Va. (March 14, 2016) – Credit unions can learn more about promoting financial literacy, financial inclusion and financial capability by participating in a webinar hosted by the National Credit Union Administration.

The webinar, “The Pathway to Financial Well-Being,” will be held Wednesday, March 30, 2016, beginning at 2 p.m. Eastern. Registration is available online here (opens new window). Participants will also use this link to log into the webinar. Registrants should allow pop-ups from this website. There is no charge for the webinar.

A financial literacy program emphasizing financial education, access to affordable financial services and financial capability to make smart money management decisions can improve an individual’s overall financial well-being. NCUA’s webinar, part of the agency’s National Financial Literacy Month activities, will provide participants with valuable information on several topics, including:

• The link between financial literacy and financial well-being;
• NCUA’s financial literacy resources;
• Building a successful financial literacy program based on credit union size and member demographics; and
• Improving financial literacy efforts through local and national partners.

Under the Federal Credit Union Act, promoting financial literacy is a core credit union mission. While credit unions serve the needs of their members and promote financial literacy within the communities they serve, NCUA works to reinforce credit union efforts, raise consumer awareness and increase access to credit union services. NCUA also participates in national financial literacy initiatives, including the Financial Literacy and Education Commission, an interagency group created by Congress to improve the nation’s financial literacy and education.

ALEXANDRIA, Va. (March 14, 2016) – The video recording of the February 2016 open meeting of the National Credit Union Administration Board is now available on the agency’s website.

Archived videos of past Board meetings may be viewed here, and each video remains on the site for one year.

At the February open meeting, the NCUA Board approved a final rule giving federally insured credit unions greater flexibility and autonomy to offer member-business loans in a safe and sound manner.

The Chief Financial Officer also briefed the Board on the performance of the National Credit Union Share Insurance Fund, which had a net income of $61.3 million for 2015.

NCUA posts these videos as part of the agency’s ongoing efforts to provide transparency and to allow those unable to attend Board meetings the opportunity to become better informed. An interval between the meeting and posting is necessary for the videos to comply with Section 508 of the Rehabilitation Act for the hearing and visually impaired.

The Board Actions page of NCUA’s website has more information, including Board agendas, which are posted at least one week in advance of each open meeting, copies of Board Action Bulletins, which summarize the meetings, copies of Board memorandums and other documents.

2015 Report Details Accomplishments in the “Year of Regulatory Relief”

ALEXANDRIA, Va. (March 15, 2015) – The National Credit Union Administration released today its 2015 Annual Report. Found online here (opens new window), the report highlights the agency’s activities, policy initiatives and accomplishments for the year.

“By nearly every measure, the credit union system and NCUA concluded 2015 in a strong position,” NCUA Board Chairman Debbie Matz said. “During the ‘Year of Regulatory Relief,’ NCUA finalized or proposed 15 modernized regulations to reduce compliance burdens or authorize new powers. Touching on key stakeholders’ concerns, these initiatives removed outdated procedures and non-statutory requirements. They also gave credit unions greater flexibility to make decisions and serve their members’ needs.
“NCUA also continued its multi-year effort to create and maintain a modern regulatory structure that allows credit unions to evolve and grow, as well as address emerging threats and risks to the system, like cyber threats and interest rate risk, among others. Our actions in 2015 helped ensure that our nation’s communities, businesses and consumers will be able to utilize the products and services of federally insured credit unions in 2016 and for years to come.”

For 2015, the agency’s initiatives and accomplishments can be grouped into ten broad categories. Specifically, the agency focused on:

• Making 2015 “The Year of Regulatory Relief”
• Modernizing regulations and programs to ensure continued strength
• Ensuring the safety and soundness of the credit union system
• Managing the Corporate Stabilization Fund
• Helping credit unions of all types and sizes thrive
• Expanding access to affordable financial services and protecting consumers
• Enhancing the agency’s transparency and engaging stakeholders
• Creating a diverse, highly skilled workforce
• Being a good corporate citizen
• Shaping the future of NCUA and the credit union system

The 2015 Annual Report also assesses NCUA’s performance in meeting its strategic and agency priority goals and objectives. The report further contains assurances of the agency’s fulfillment of financial management laws and compliance requirements, as well as the complete audited financial statements of each of NCUA’s four permanent funds.

The 2015 Annual Report additionally provides detailed statistics that illustrate the performance of federally insured credit unions in 2015 and over the last five years.