States Stake Claim to Half of all Assets Among U.S. Credit Unions at Mid-Year

State-chartered credit unions (SCUs) now hold approximately half of all assets in U.S. credit unions, according to mid-year data released last week by NCUA, and figures compiled by NASCUS. According to the figures, SCUs (both federally and privately insured, as reported by American Share Insurance) held $880 billion of the total $1.77 trillion held by all U.S. credit unions.

Since at least year-end 2018, state credit unions have inched closer to the 50% mark as their growth has matched or exceeded that of federal credit unions. Over the most recent quarter, savers poured money into credit unions in a “flight to safety” as they faced the financial impact of the coronavirus crisis. SCU assets grew at a rate of about three to two over that of federal credit unions (FCU), with states adding

$64.1 billion during the second quarter and federals adding $46.7 billion.

Since the end of 2019, SCU assets have grown 12.6% (with much of that in the second quarter), and FCU assets have increased 10.9%.

On the membership side, SCUs now account for just under 60 million (59.7 million) members; and FCUs total 63.9 million. Memberships grew in both the first and second quarters of the year for both charter types, but slowed slightly in the second quarter for both, according to the numbers. Even so, SCUs continued to outpace FCUs in member growth by a rate of five to four. 

The number of credit unions overall continued to decline. According to the numbers there were 5,274 SCUs and FCUs as of June 30, compared to 5,347 at year-end 2019. Most of the reduction were in FCUs (about 71%). Overall, at midyear, there were 2,042 SCUs and 3,232 FCUs.

“Clearly members see their SCUs as sources of strength and safety during the pandemic, as they funnel their excess funds there,” said NASCUS President and CEO Lucy Ito. “Safety and soundness of SCUs no doubt plays a critical role in savers’ minds. But flexible regulation state-by-state must also be a factor as members recognize their credit unions can effectively meet their needs.”

The NCUA numbers on federally insured credit unions also showed:

• An overall net worth ratio of 10.46% (down from year-end 2019 of 11.37%); and
• A Return on Average Assets (ROAA) of 0.57% (down from 0.93% at the end of last year).
  

The credit union’s ROAA for mid-year 2020 compares favorably to that of banks, which the FDIC released two weeks ago. Those numbers showed the banks’ ROAA of 0.36% at mid-year (down from 1.38% at mid-year 2019).

Source: Texas Credit Union Department