ARLINGTON, Va.— The Credit Union Sentiment Index published by NAFCU, which is based on CU exec responses to eight questions based on growth and earnings outlook, lending conditions and regulatory burden, has hit its lowest point on record.
According to NAFCU, the CUSI hit its lowest-ever point in November after all four component scores fell during the month, with the growth score seeing the sharpest drop.
Among survey respondents, 19% rated growth conditions at their credit unions as "somewhat poor," another record for the index.
Increase in Certain SARS Filings
Meanwhile, a separate report reveals an increase in the number of defensive filings of suspicious activity reports (SARs) by CUs in the past year, as well as a record-setting decline in credit unions’ confidence for their business—with the outlook for growth the biggest concern.
The latest edition of NAFCU's Economic & CU Monitor report found nearly half of survey respondents saw a SARs increase.
NAFCU noted it has actively sought Bank Secrecy Act (BSA)/anti-money laundering (AML) regime-related improvements and relief for credit unions, most recently advocating for lawmakers in the Senate to hold a markup of the ILLICIT CASH ACT (S. 2563).
‘Less Than Clear’
"NAFCU has often noted that the decision whether to file a SAR may be less than clear," stated NAFCU Chief Economist and Vice President of Research Curt Long. "Identifying suspicious activity requires a degree of subjective judgement, and the quality and breadth of guidance issued by regulators like [the Financial Crimes Enforcement Network (FinCEN)] or the Federal Financial Institutions Examination Council (FFIEC) is critical."
The survey also revealed many respondents viewed current FinCEN guidance regarding SAR filings as "merely adequate," with a quarter of respondents indicating that they would like additional resources from the agency.