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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:

 

Agency Sees Increases in Overall Satisfaction, Leadership, Veterans, Diversity

ALEXANDRIA, Va. (Dec. 9, 2015) – The National Credit Union Administration showed improvement in several key areas of employee satisfaction in the Partnership for Public Service’s 2015 “Best Places to Work” report (opens new window).

“Maintaining a work environment that motivates employees to do their best is one of my top priorities,” NCUA Board Chairman Debbie Matz said. “When people believe in their mission, their leadership and the importance of their work, that promotes loyalty, encourages innovation and results in better service, in this case, to credit unions and their members. The increase in overall employee satisfaction this year reflects our ongoing commitment to making this agency an employer of choice.”

NCUA’s overall employee satisfaction score was 71.7, up from 69.4 in 2014. The agency’s rank among mid-sized federal agencies—those with between 1,000 and 14,999 employees—was eighth out of 24. NCUA’s score improved in nearly every category, including effective leadership, support for diversity, teamwork and work/life balance.

The 2015 report, released Tuesday, also found that NCUA, compared to other mid-sized agencies:

• Ranked first among veterans;
• Ranked second among Hispanics and employees with disabilities;
• Ranked fourth among African-Americans, Asians and Whites;
• Ranked fourth among women, men and employees above 40 years old; and
• Ranked fifth among employees under 40 years old.

NCUA is often recognized for the quality of its work environment. Earlier this year, DiversityComm, Inc., a human resources research and consulting firm specializing in workplace diversity, named the agency a “Best of the Best” place to work for minorities, women, veterans and Hispanics.

This is the tenth edition of the Best Places to Work rankings; the first was published in 2003. The reports are based on data from the Federal Employee Viewpoint Survey. Nearly 433,300 federal workers participated in the 2015 survey, including 777 NCUA employees.

Most Recent Settlement Resolves Cases in New York and Kansas Federal Courts

ALEXANDRIA, Va. (Dec. 10, 2015) – The National Credit Union Administration today announced a settlement with Morgan Stanley for $225 million to resolve claims arising from losses related to corporate credit unions’ purchases of faulty residential mortgage-backed securities.

“NCUA continues to pursue recoveries on behalf of the corporate credit unions against the financial firms we maintain contributed to the corporates’ losses,” NCUA Board Chairman Debbie Matz said. “These actions fulfill our statutory obligation to act in order to minimize costs to the credit union system resulting from the crisis. They also promote accountability and ensure consumers remain protected.”

NCUA Associate General Counsel John Ianno recognized the U.S. Justice Department’s involvement in the litigation.

“We appreciate the efforts of the Department of Justice, with whom we have worked closely in achieving this favorable resolution,” Ianno said.

The settlement covers claims asserted in 2013 by the NCUA Board on behalf of U.S. Central Federal Credit Union, Western Corporate Federal Credit Union, Members United Corporate Federal Credit Union and Southwest Corporate Federal Credit Union. NCUA will dismiss pending suits against Morgan Stanley in federal district courts in New York and Kansas. Morgan Stanley does not admit fault in the settlement.

Net proceeds from this settlement and others are used to pay claims against the failed corporate credit unions, including those of the Temporary Corporate Credit Union Stabilization Fund. Stabilization Fund recoveries reduce borrowings from the U.S. Treasury and eliminate the need for assessments to federally insured credit unions.

NCUA was the first federal regulatory agency for depository institutions to recover losses from investments in these securities on behalf of failed financial institutions.

NCUA continues to pursue litigation in federal courts in New York, Kansas and California against financial firms, including RBS, Goldman Sachs, UBS and Credit Suisse, based on the sale of faulty securities that caused the collapse of five corporate credit unions. The agency, on behalf of the failed corporates, has other litigation pending against securities firms alleging violations of state and federal anti-trust law by manipulation of interest rates through the London Interbank Offer Rate system. NCUA also has pending suits against financial firms alleging their failure to perform their duties as trustees of residential mortgage-backed securities trusts.

Median Asset and Deposits Growth Up, Median Delinquency Rates Down

ALEXANDRIA, Va. (Dec. 11, 2015) – Median loan growth in federally insured credit unions was 4.1 percent during the year ending Sept. 30, 2015, and all states reported positive growth, according to state-level data compiled by the National Credit Union Administration and released today.

Nationally, median asset growth over the year ending Sept. 30 was 2.4 percent, while median growth in shares and deposits was 2.3 percent. The median loan-to-share ratio was up 2.0 percentage points from a year earlier. Aggregate annualized return on average assets in the first three quarters of 2015 was 80 basis points, down slightly from the same period a year earlier. The median total delinquency rate declined to 0.8 percent from 0.9 percent a year earlier. Overall membership in credit unions continued to grow, although the median rate of growth was negative 0.2 percent. Membership growth continued to be concentrated in larger credit unions. Overall, 52 percent of federally insured credit unions had fewer members at the end of the third quarter of 2015 than a year earlier.

The NCUA Quarterly U.S. Map Review, available here, tracks performance indicators for federally insured credit unions 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 Rates Positive in Every State; Idaho, Alaska Highest

Nationally, median growth in loans outstanding was 4.1 percent during the year ending in the third quarter of 2015, up from 3.5 percent in the year ending in the third quarter of 2014. The highest median growth rates for loans were in Idaho (10.0 percent) and Alaska (9.0 percent). Arkansas (0.3 percent) had the lowest median loan growth, followed by New Jersey (0.7 percent).

Utah, Nevada Credit Unions Post Highest Aggregate Returns on Average Assets

Nationally, the annualized aggregate return on average assets at federally insured credit unions was 80 basis points during the first three quarters of 2015, down from 83 basis points a year earlier. The aggregate return on average assets was positive in every state during the first three quarters of 2015.

Utah (139 basis points) had the highest aggregate return, followed by Nevada (113 basis points). New Jersey (22 basis points) and Connecticut (34 basis points) posted the lowest aggregate returns on average assets.

Median Asset Growth Rate 2.4 Percent; Idaho and New Hampshire Highest

Median asset growth was 2.4 percent nationally in the year ending in the third quarter of 2015, up from 1.4 percent a year earlier. Median asset growth was highest in Idaho (6.3 percent), followed by New Hampshire (5.7 percent). The median level of assets was unchanged in New Jersey and grew in all other states.

Median Shares and Deposits Growth Up; Alaska and New Hampshire Lead

Nationally, federally insured credit unions’ median growth rate in shares and deposits was 2.3 percent in the year ending in the third quarter of 2015, up from 1.1 percent during the previous year. The median growth rate in shares and deposits was highest in Alaska (7.6 percent) and New Hampshire (6.9 percent). The median growth rate in shares and deposits was negative in New Jersey (-0.6 percent) and Delaware (-0.2 percent).

Idaho, Vermont Show 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 third quarter of 2015, compared to 60 percent at the end of the third quarter of 2014. The median loan-to-share ratio was highest among credit unions in Idaho (88 percent) and Vermont (82 percent). The median loan-to-share ratio was lowest in Hawaii (43 percent) and Delaware (46 percent).

Median Total Delinquency Rate Declines from 2014

The median delinquency rate at federally insured credit unions was 0.8 percent nationally in the third quarter of 2015, down from 0.9 percent a year earlier. Five states—California, Colorado, North Dakota, Oregon and South Dakota—shared the lowest median delinquency rate (0.4 percent). Delaware (1.5 percent) reported the highest median delinquency rate, followed by the District of Columbia and New Jersey (both 1.4 percent).

Membership Growth Remains Concentrated in Larger Credit Unions

Overall membership in federally insured credit unions continued to grow in the year ending in the third quarter of 2015, with growth again concentrated in larger institutions. The median membership growth rate was negative 0.2 percent. Nationally, 52 percent of federally insured credit unions had fewer members than a year earlier. Credit unions with falling memberships tend to be small; about 75 percent had less than $50 million in assets.

Alaska (3.9 percent) had the highest median membership growth rate, followed by Idaho (3.4 percent). Median membership growth was negative in 23 states, with Pennsylvania (-2.2 percent) ranking lowest.

ALEXANDRIA, Va. (Dec. 15, 2015) – The National Credit Union Administration announced today the December 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:

• Proposed Rule on Field of Membership Offers Regulatory Relief, Growth Opportunities
• Chairman’s Corner: Future of Credit Unions Depends on Viable Membership Fields
• Vice Chairman Metsger’s Perspective: Members: The Heart and Soul of Every Credit Union
• Board Member McWatters’ Perspective: Exam Appeals: Credit Unions Deserve a Better Process
• Board Actions: Two-Year Budget Approved with Smallest Percentage Increase Since 2007
• Great Flexibility Means Credit Union Boards Have to Be Engaged
• Help Keep Your Members Safe This Holiday Season

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).

ALEXANDRIA, Va. (Dec. 15, 2015) – National Credit Union Administration Board members have agreed to add an item to the agenda of the closed Board meeting set for Thursday, Dec. 17, 2015.

The Board will now receive a briefing on a supervisory matter.

The agendas for the Dec. 17 open and closed meetings are available online
here.

ALEXANDRIA, Va. (Dec. 16, 2015) – The video recording of the November 2015 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.

The November open Board meeting’s agenda consisted of six 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; and
• A briefing from the Chief Financial Officer on the performance of the Temporary Corporate Credit Union Stabilization Fund, which remained in a positive net position.

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.

ALEXANDRIA, Va. (Dec. 16, 2015) – Consumers now have a new information resource to help learn about and protect themselves against fraud with the launch of the National Credit Union Administration’s new
Fraud Prevention Center (opens new window).

Each year, scam artists and identity thieves steal billions of dollars from unsuspecting consumers. They use the telephone, email, text messaging, postal mail and the internet to steal information or trick consumers into handing over money. The new Fraud Prevention Center helps consumers learn how to recognize common scams, take action if they think they are victims of fraud and protect their finances.

With the site’s easy-to-use navigation and mobile-responsive design, users can access a number of resources from NCUA and other federal partners. The Fraud Prevention Center has sections covering a variety of topics, including:

• Frauds and Scams: learn about the newest and most common types of frauds or scams, what to do if you become a victim of fraud and how to report a scam;
• Identity Theft: discover what steps you can take to prevent and report identity theft;
• Online Security: get tips for staying safe online;
• Fraud Alerts: stay a step ahead with the latest information and practical tips about recent frauds and scams; and
• Fraud Resources: visit other NCUA partners for additional fraud prevention resources.

The Fraud Prevention Center is also accessible through NCUA’s newly redesigned online
Consumer Assistance Center (opens new window).

NCUA supports credit unions and their members with financial literacy and consumer protection resources available without cost at
MyCreditUnion.gov (opens new window). NCUA also provides up-to-date financial education information on the agency’s
YouTube channel (opens new window),
Facebook (opens new window) page and consumer
Twitter (opens new window) feed.