ARLINGTON, Va.—Net interest margins at credit unions have been “plummeting” as credit union share growth remains at an all-time high on a year-over-year basis and loan growth remains stable overall – heavily influenced by first mortgage real estate loans, NAFCU reported in a new analysis.
"Credit unions entered the crisis in strong standing, and the industry remains on solid footing despite considerable challenges," said NAFCU Chief Economist and Vice President of Research Curt Long, in response to the strong third quarter data. "Nevertheless, the combination of extraordinary share growth plus the extension of forbearance to millions of members means that capital relief for credit unions remains a priority."
Other Data Points
Other key data from NAFCU's latest Credit Union Industry Trends Report:
- Member growth has been on the rise in the Southern region, but has fallen in the West
- Net interest margins are plummeting due to the combination of surging asset growth, low interest rates, and low non-real estate loan demand
- Long-term investments are now at their highest level since 2013
- Average loan balances fell during the quarter among credit unions with under $500 million in assets
- Coverage ratios are spiking as credit unions continue to build loan loss reserves for next year