ARLINGTON, Va.–As CUToday.info first reported here, overall positive year-end 2020 numbers mask the fact credit unions in every asset category under $500 million lost both members and loans last year. It’s a trendline that has led to another trend, and one person doesn’t expect it to change.
Carrie Hunt, EVP and general counsel with NAFCU, said the ongoing trend of credit union mergers is only expected to continue, especially among the smallest CUs.
The new NCUA data for year-end 2020, for instance, show huge declines in loan portfolios and overall membership among credit unions of $10 million and below in assets.
“In the future we have concerns over the overall regulatory environment and growth for the industry,” said Hunt.
That includes the future for start-ups. As CUToday.info reported, two members of the NCUA board placed blame on NCUA’s bureaucracy for the lack of de novo credit unions.
The Larger Challenge
But Hunt said the picture is larger than just the challenge of meeting all the requirements to charter a credit union.
“It’s very difficult in this day and age to start any financial institution,” said Hunt. “So much more is required in terms of what consumers expect. That’s the key differentiation from 20 years ago.”
The challenge with start-ups today is dominated by delivery of services, especially e-delivery, which Hunt said is “critical.”
Hunt said NAFCU supports chartering credit unions to serve any area where no CU services are available, but said it supports even more strongly a “fresh approach to what it takes to start a credit union.”
That includes proposals around capital relief, the ability to partner with other credit unions and more, said Hunt.
“Ultimately,. NAFCU’s goal is for everyone to have the ability to join a credit union,” she added.