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Joint Release:

• Board of Governors of the Federal Reserve System
• Federal Deposit Insurance Corporation
• National Credit Union Administration
• Office of the Comptroller of the Currency

For Immediate Release: May 31, 2017

WASHINGTON—Responding to concerns over the limited availability of state-certified and -licensed appraisers, particularly in rural areas, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency today issued an advisory that highlights two options to help insured depository institutions and bank holding companies facilitate the timely consideration of loan applications.

Financial industry representatives, during the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) review process (opens new window), raised concerns regarding the timeliness of appraisals, which they attributed to shortfalls in the availability of state-certified and -licensed appraisers, particularly in rural areas.

Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) requires appraisals for federally related transactions to be performed by individuals who meet certain state-certification or -licensing requirements. Today’s advisory points to alternatives that may help in areas facing a shortage of appraisers:

• The first option highlighted in the advisory, temporary practice permits, allows appraisers credentialed in one state to provide their services on a temporary basis in another state experiencing a shortage of appraisers, subject to state law. The advisory also discusses reciprocity, in which one state allows appraisers that are certified or licensed in another state to obtain certification or licensing without having to meet all of the state’s certification or licensing standards.
• The second option, temporary waivers, sets aside requirements relating to the certification or licensing of individuals to perform appraisals under Title XI of FIRREA in states or geographic political subdivisions where certain conditions are met. Temporary waivers may be granted when it is determined that there is a scarcity of state-certified or -licensed appraisers leading to significant delays in obtaining an appraisal.

Attachment: Advisory on Appraiser Availability – PDF (opens new window)

Follow the Conversation at @TheNCUA

ALEXANDRIA, Va. (June 1, 2017) – Credit unions can share their experiences using the National Credit Union Administration’s new online Learning Management Service during an #NCUAChat scheduled for Wednesday, June 7, beginning at 2 p.m. Eastern.

During the chat, staff from NCUA’s Office of Small Credit Union Initiatives will be available to answer user questions, discuss training courses already in the system, outline upcoming courses, and preview other enhancements to the service.

Credit unions can follow @TheNCUA (opens new window) on Twitter and join the conversation using the hashtag #NCUAChat. Participants can submit questions in advance to [email protected].

Developed by the Office of Small Credit Union Initiatives, NCUA’s Learning Management Service (opens new window) offers users access to training courses beneficial to credit union staff and volunteers. Registration is required to access the service. Users should view this brief tutorial video (opens new window) to learn more about creating an account and the service’s training categories.

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.

ALEXANDRIA, Va. (June 5, 2017) – Data on the financial performance of federally insured credit unions in the quarter ending March 31, 2017, are now available from the National Credit Union Administration.

NCUA makes detailed credit union system performance data available on its Credit Union and Call Report Data webpage, including Call Report quarterly summaries (opens new window) and financial performance reports. The agency’s Industry Data page includes a Financial Trends in Federally Insured Credit Unions package (opens new window) illustrating industry trends.

Selected Performance Indicators

• Total assets in federally insured credit unions rose by $97 billion, or 7.8 percent, over the year to $1.34 trillion in the first quarter of 2017.
• Total loans outstanding increased $85 billion, or 10.6 percent, over the year to $884.6 billion. The average outstanding loan balance in the first quarter of 2017 was $14,497, up $674, or 4.9 percent, from one year earlier.
• The delinquency rate at federally insured credit unions was 69 basis points in the first quarter of 2017, little changed from 71 basis points one year earlier. The net charge-off ratio was 58 basis points, up from 52 basis points in the first quarter of 2016.
• Insured shares and deposits rose $78 billion, or 7.8 percent, over the four quarters ending in the first quarter of 2017 to $1.1 trillion.
• The loans-to-shares ratio stood at 77.7 percent in the first quarter of 2017, up from 76.1 percent in the first quarter of 2016.
• The credit union system’s net worth ratio was 10.70 percent in the first quarter of 2017, compared with 10.78 percent one year earlier.
• Net income totaled $9.4 billion at an annual rate in the first quarter of 2017, up $0.2 billion, or 2.6 percent, from the same period a year ago.
• The net interest margin for federally insured credit unions was $38.0 billion in the first quarter of 2017, or 2.9 percent of average assets.
• The return on average assets for federally insured credit unions was 71 basis points for the first quarter of 2017, little changed from 75 basis points in the first quarter of 2016. The median return on average assets across all federally insured credit unions was 33 basis points, unchanged from the first quarter of 2016.
• The number of federally insured credit unions declined to 5,737 in the first quarter of 2017 from 5,954 in the first quarter of 2016. In the first quarter of 2017, there were 3,584 federal credit unions and 2,153 federally insured, state chartered credit unions. The year-over-year decline is consistent with long-running industry trends.
• The number of credit unions with a low-income designation rose to 2,518 in the first quarter of 2017 from 2,348 one year earlier.
• Federally insured credit unions added 4.3 million members over the year, and credit union membership in these institutions reached 108.0 million in the first quarter of 2017.

Balance Sheet Details

Assets

• Total assets in federally insured credit unions rose by $97 billion, or 7.8 percent, over the year to $1.34 trillion in the first quarter of 2017.
• Cash and equivalents (assets with maturity of three months or less) rose $7.5 billion, or 6.6 percent, to $121.1 billion.
• Total investments (instruments with maturities in excess of three months) increased $3.1 billion, or 1.1 percent, to $275.5 billion.
  • Investments with maturities of less than one year rose $7.0 billion, or 10.0 percent, to $77.2 billion.
  • Investments with maturities of one to three years declined $12.9 billion, or 12.4 percent, to $90.6 billion.
  • Investments with maturities of three to five years increased $2.3 billion, or 3.3 percent, to $69.5 billion.
  • Investments with maturities of five to 10 years were up $6.9 billion, or 25.4 percent, to $33.9 billion.
  • Investments with maturities greater than 10 years edged down $0.2 billion, or 3.6 percent, to $4.3 billion.
• Total loans outstanding increased $85.1 billion, or 10.6 percent, over the year to $884.6 billion. Credit union loan balances rose over the year in every major category, compared with the first quarter of 2016.
  • Auto loans increased $37.0 billion, or 13.7 percent. Used auto loans rose $20.0 billion, or 12.0 percent, to $186.8 billion. New auto loans rose $17.0 billion, or 16.5 percent, to $120.0 billion.
  • Real estate loans rose $36.7 billion, or 9.1 percent, over the year to $438.9 billion in the first quarter of 2017.
  • Net member business loan balances, including unfunded commitments, increased $9.1 billion, or 15.3 percent, to $68.9 billion in the first quarter.
  • Credit card balances rose $3.7 billion, or 7.8 percent, to $51.6 billion
  • Non-federally guaranteed student loans rose $0.4 billion, or 9.8 percent, to $4.0 billion.
• The delinquency rate at federally insured credit unions was 69 basis points in the first quarter of 2017, little changed from 71 basis points one year earlier. Loan performance was mixed across categories:
  • The delinquency rate on fixed real estate loans was 38 basis points in the first quarter, down from 49 basis points one year earlier.
  • The credit card delinquency rate was 109 basis points, up from 95 basis points in the first quarter of 2016.
  • For auto loans, the delinquency rate was 57 basis points in the first quarter of 2017 compared with 54 basis points one year earlier.
  • The delinquency rate for member business loans stood at 161 basis points, up from 141 basis points in the first quarter of 2016.
• The net charge-off ratio for all federally insured credit unions was 58 basis points in the first quarter of 2017, up from 52 basis points in the first quarter of 2016.

Liabilities and New Worth

• Credit union shares and deposits rose by $87.1 billion, or 8.3 percent, over the year to $1.14 trillion in the first quarter of 2017. Regular shares rose $45.8 billion, or 12.4 percent, to $416.5 billion. Other deposits increased $30.7 billion, or 5.9 percent, to $555.5 billion, led by money market accounts, which rose $18.2 billion, or 7.7 percent, and share certificate accounts, which were up $8.5 billion, or 4.4 percent.
• The credit union system’s net worth increased by $9.3 billion, or 6.9 percent, over the year to $143.1 billion. The aggregate net worth ratio – net worth as a percentage of assets – stood at 10.70 percent in the first quarter of 2017 compared with 10.78 percent one year earlier.

Income Statement Details

• Net income for federally insured credit unions in the first quarter of 2017 totaled $9.4 billion at an annualized rate, up $0.2 billion, or 2.6 percent, from the first quarter of 2016. Interest income rose $3.5 billion, or 8.5 percent, over the year to $44.8 billion, and non-interest income increased $0.9 billion, or 5.6 percent, to $16.9 billion.
• Interest expense totaled $6.8 billion annualized in the first quarter of 2017, up $0.6 billion, or 9.3 percent, from one year earlier. Non-interest expenses grew $2.4 billion, or 6.3 percent, over the year to $39.9 billion in the first quarter. Rising labor expenses, which were up $1.5 billion, or 7.5 percent, accounted for more than half of the increase in non-interest expenses.
• The aggregate net interest margin widened $2.9 billion over the year, or 8.3 percent, to $38.0 billion at an annual rate in the first quarter of 2017.
• The credit union system’s provision for loan and lease losses rose $1.2 billion over the year, or 27.8 percent, to $5.6 billion at an annual rate in the first quarter of 2017.

Performance by Asset Category

• Consistent with long-running trends, credit unions with assets greater than $1 billion reported the strongest growth in loans, membership and net worth over the year ending in the first quarter of 2017. Credit unions with less than $50 million in assets reported declines in loans, membership and net worth over the year.
• The number of credit unions with assets greater than $1 billion increased from 263 in the first quarter of 2016 to 278 in the first quarter of 2017. These 278 federally insured credit unions held 62 percent of total system assets. Loan growth was 14.7 percent over the year. Membership rose 9.8 percent. Net worth increased 11.3 percent.
• The number of credit unions with more than $100 million but less than $500 million in assets rose from 1,047 in the first quarter of 2016 to 1,053 in the first quarter of 2017. These credit unions reported loan growth of 2.9 percent over the year ending in the first quarter of 2017. At the end of the first quarter of 2017, the 1,053 federally insured credit unions in this category held $235 billion in total assets, or 18 percent of total system assets.
• The number of credit unions with less than $50 million in assets fell over the year ending in the first quarter of 2017 to 3,436 from 3,682 in the first quarter of 2016. These credit unions accounted for 4 percent of total system assets in the first quarter of 2017.
• Credit unions with $10 to $50 million in assets reported a 4.5 percent decline in loans, an 8.3 percent decline in membership, and a 5.7 percent decline in net worth. There were 1,828 credit unions in this category in the first quarter of 2017, down from 1,927 in the first quarter of 2016.
• For credit unions with less than $10 million in assets, loans declined 6.7 percent, membership fell 10.8 percent, and net worth declined 7.1 percent. The number of credit unions in this category declined from 1,755 in the first quarter of 2016 to 1,608 in the first quarter of 2017.

The NCUA Board placed three credit unions into conservatorship: LOMTO Federal Credit Union (Woodside, NY); Riverdale Credit Union (Selma, AL); and Citizens Community Credit Union (Devils Lake, ND).

The NCUA Board also considered an appeal of denial of official, which remains confidential at this time.

ALEXANDRIA, Va. (June 12, 2017) – Federally insured credit unions across the country saw continued improvement in nearly every category during the first quarter of 2017, 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 4.4 percent during the year ending in the first quarter. Median asset growth was 3.9 percent; the median rate of growth in deposits and shares was 4.2 percent; and the median loans-to-shares ratio was 62 percent.

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

All States Report Positive Loan Growth in First Quarter

Nationally, median growth in loans outstanding was 4.4 percent over the year ending in the first quarter of 2017, just under the 4.5 percent growth rate a year before. The highest median growth rates for loans were in Oregon (10.9 percent), followed by Nevada and Washington (both 9.4 percent). Median loan growth was lowest in Pennsylvania (1.1 percent), followed by Connecticut (1.3 percent).

Oregon, Maine Report Highest Median Asset Growth Rates

Median asset growth was 3.9 percent nationally in the year ending in the first quarter of 2017, up from 2.9 percent the year before. Median asset growth was fastest in Oregon (9.3 percent), followed by Maine (8.0 percent). Median asset growth was lowest in Arkansas and the District of Columbia (both 0.4 percent).

Shares and Deposits Rise in Every State

At the median, shares and deposits rose in every state over the year ending in the first quarter.

Nationally, the median growth rate in shares and deposits was 4.2 percent, up from 3.0 percent a year earlier.

The median growth rate in shares and deposits was highest in Oregon (9.5 percent) and Maine (8.6 percent). The median growth rate in shares and deposits was lowest in the District of Columbia (0.9 percent) and Arkansas (1.0 percent).

77 Percent of Credit Unions Report Positive Net Income

Nationally, 77 percent of federally insured credit unions had positive net income during the first quarter of 2017, essentially unchanged from 78 percent in the same period in 2016.

At least 60 percent of credit unions in every state had positive net income during the first quarter. The share of federally insured credit unions with positive net income was highest in Oregon (97 percent), followed by Maine and Iowa (both 93 percent). The share of federally insured credit unions with positive net income was lowest in Arkansas (64 percent) and Mississippi (67 percent).

Median Returns on Average Assets Highest in Nevada, Oregon

Nationally, the median annualized return on average assets at federally insured credit unions was 33 basis points during the first quarter of 2017, matching the rate from the first quarter of 2016.

Nevada (72 basis points) had the highest median annualized return on average assets during the first quarter, followed by Oregon (59 basis points). New Jersey and Connecticut (both 19 basis points) reported the lowest median return on average assets.

Alaska, Idaho Share Highest Median Loans-to-Shares Ratio

Nationally, the median ratio of loans outstanding to total shares and deposits was 62 percent at the end of the first quarter of 2017, little changed from 61 percent at the end of the first quarter of 2016. The median loans-to-shares ratio was highest among credit unions in Alaska and Idaho (both 85 percent). The median loans-to-shares ratio was lowest in Delaware (43 percent) and Hawaii (46 percent).

Median Total Delinquency Rate Declines

The median total delinquency rate among federally insured credit unions was 63 basis points at the end of the first quarter of 2017, down from 68 basis points in the same period in 2016. At the end of the first quarter of 2017, the median delinquency rate was lowest in New Hampshire (22 basis points), followed by California (30 basis points). The median delinquency rate was highest in New Jersey (149 basis points), followed by West Virginia (112 basis points).

Larger Credit Unions Still Pacing Membership Growth

Credit union membership continued its overall growth during the year ending in the first quarter of 2017, though at the median, membership declined 0.1 percent. Membership was unchanged at the median over the previous year.

Overall, 51 percent of federally insured credit unions had fewer members at the end of the first quarter of 2017 than a year earlier. Median membership growth was negative in 22 states. About 75 percent of credit unions with declining membership had assets of less than $50 million.

Alaska (2.6 percent) had the highest median membership growth rate over the year ending in the first quarter of 2017, followed by Washington (2.4 percent). At the median, membership declined the most in the District of Columbia (-2.4 percent), followed by Pennsylvania (-1.5 percent).

New Credit Union Will Provide Affordable Financial Services to a Low-Income Community in Lincoln, Nebraska

ALEXANDRIA, Va. (June 12, 2017) – The National Credit Union Administration has granted a federal charter and Share Insurance Fund coverage to Community HOPE Federal Credit Union in Lincoln, Nebraska.

Community HOPE will be able to serve approximately 40,000 residents who live, work, worship, attend school, participate in associations headquartered in, or participate in programs to alleviate poverty or distress located in a prescribed community in Lincoln from a service facility in Lincoln’s downtown.

The new credit union will provide residents in the prescribed community access to affordable financial services. During its first year of operations, the credit union plans to offer:

• Regular shares
• Share drafts
• Short-term unsecured loans
• Share-secured loans
• Auto loans
• Money orders
• Cashier checks
• Wire transfers

The credit union also plans to offer financial literacy training programs.

NCUA also granted Community HOPE a low-income designation, making it eligible for certain benefits—including NCUA grants and low-interest loans as well as an exemption from the member-business lending loan limit—to help it better serve low-income members in its community.

ALEXANDRIA, Va. (June 14, 2017) – The National Credit Union Administration Board has re-scheduled its June open and closed meetings.

The June closed meeting will be held Wednesday, June 21, beginning at 3:30 p.m. Eastern.

The June open meeting will be held Friday, June 23, beginning at 10 a.m. Eastern.

Both meetings were originally scheduled for Thursday, June 22.

Meeting agendas are available on NCUA’s Board Meeting Calendar and Actions webpage. The June open Board meeting, like all NCUA open board meetings, will be available on livestream.

NCUA Working to Provide Regulatory Relief, Close Stabilization Fund

WASHINGTON (June 14, 2017) – Credit unions can expect more regulatory relief and streamlined operations from the National Credit Union Administration in the future, Acting Board Chairman J. Mark McWatters said today.

McWatters described agency goals and steps NCUA has already taken to reduce burdens and better align regulation with the realities of 2017. NCUA, he said, has made changes to streamline the examination process, and staff is carefully studying the possibility of closing the Stabilization Fund this year. The agency is reviewing its operational structure and budget to find economies.

The over-arching goal, McWatters said, is to provide credit unions with an efficient regulatory structure that returns decision-making to the ground level while adhering to NCUA’s statutory duty to protect America’s 108 million credit union account holders.

McWatters covered a variety of credit union topics during his remarks to a crowd of more than 1,500 at the National Association of Federally Insured Credit Unions annual conference.

He noted the Treasury Department report on regulatory reform released Monday and said he was pleased the report’s recommendations regarding NCUA and the credit union system followed the direction the agency has set for itself. The plan released by Treasury was comprehensive, substantive, and practical and, with respect to its recommendations concerning credit union regulation, is consistent with the policies NCUA is advancing.

McWatters has said that, in particular, he wants the Board to revisit the risk-based capital and stress testing rules.

Closing the Stabilization Fund in 2017 remains a top priority, McWatters said. NCUA staff has been working on a plan that the agency’s Board expects to receive in the coming weeks. That closure would begin the process of returning surplus funds to federally-insured credit unions through a Share Insurance Fund dividend in 2018.

McWatters said the Board has already acted on items in his agenda, approving proposed rules to provide greater member communication in voluntary mergers and to improve the appeals process. He also wants to act in the areas of cyber security, combatting fraud, and finding ways to help smaller and low-income credit unions thrive.

ALEXANDRIA, Va. (June 21, 2017) – The video recording of the May 25, 2017, 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 May open meeting, the Board unanimously approved three items:

• A proposed rule to provide greater transparency to members of federal credit unions when those credit unions are seeking voluntary mergers.
• A proposed rule to enhance due process and provide consistency with other federal financial institutions regulators in the supervisory appeals process.
• A proposed rule to provide uniform, comprehensive procedures to govern the agency’s regulatory appeals process.

The Board also received a briefing from the Chief Financial Officer on the performance of the Temporary Corporate Credit Union Stabilization Fund, which remains 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.

NCUA Acting Chairman Highlights Field of Membership, Member Business Lending, and Supplemental Capital

WASHINGTON (June 22, 2017) – National Credit Union Administration Acting Chairman J. Mark McWatters today recommended that Congress support the agency’s efforts to ease regulatory burdens on credit unions by tailoring and simplifying federal law.

“The NCUA encourages Congress to consider providing regulators with enhanced flexibility to write rules rather than imposing rigid requirements,” McWatters said. “Such flexibility would allow the agency to effectively limit additional regulatory burdens consistent with safety and soundness considerations.”

Paying particular attention to the diversity of scale and business models in financial institutions and recognizing that smaller institutions face their own challenges, McWatters highlighted legislative measures Congress could take to benefit credit unions.

“Permitting the NCUA greater discretion with respect to scale and timing when implementing broad statutory language would help mitigate the costs and administrative burdens imposed on smaller institutions,” he said. “Many credit unions are very small and operate on extremely thin margins. They are challenged by unregulated or less-regulated competitors as well as limited economies of scale.”

McWatters testified during a hearing of the Senate Banking, Housing, and Urban Affairs Committee. The text of McWatters’ testimony is available online here.

McWatters discussed three specific areas where Congress could reduce burdens on credit unions:

• Field of membership, especially with an eye towards reaching underserved consumers and communities;
• Member business lending, particularly granting regulatory parity with banks in residential lending; and
• Supplemental capital, allowing healthy and well-managed credit unions access, which would lead to a stronger capital base for credit unions and greater protection for taxpayers.

McWatters explained steps the NCUA has already takes to modernize regulation, including its three-year rolling review of rules and its voluntary participation in the Economic Growth and Regulatory Paperwork Reduction Act process. The agency also has chosen to comply with the spirit of recently issued Executive Orders addressing financial services regulation.

“The NCUA is committed to promulgating targeted regulation, accompanied by a thoughtfully tailored supervisory and examination program,” McWatters said. “The agency endeavors to identify emerging adverse trends in a timely manner and remains mindful that regulators should learn from the past, yet focus on the future.”

The agency also has implemented a flexible examination schedule that extends examination cycles up to 18 months. The NCUA has updated its field-of-membership, member-business-lending, and fixed-asset rules, McWatters said, and worked to help small credit unions with access to secondary capital, an expedited examination process, exemption from some rules, and facilitating the processes of obtaining the low-income credit union and community development financial institutions designations.

The NCUA is considering several initiatives that are likely to be implemented in the near future, including closure of the Temporary Corporate Credit Union Stabilization Fund, modernizing the Call Report and credit union Profile systems, and creation of the Enterprise Solutions Management program to make examinations, data collection, and reporting more effective and cost-efficient.

McWatters also indicated he intends to revisit the agency’s risk-based capital rule to determine whether significant revision or repeal is warranted.