ARLINGTON, Va.—The rising-interest-rate environment has credit union leaders more confident about the economy and the future of their credit unions, NAFCU’s latest Credit Union Sentiment Index (CUSI) reveals.
The CUSI improved in March as the recent rise in interest rates led to a rosier outlook for earnings, which was only partially offset by weaker assessments of loan demand, NAFCU said.
Separately, NAFCU's latest Economic & CU Monitor survey shows that three quarters of respondents had received a low-income designation from the NCUA. Among this group, 45% indicated they took advantage of special regulatory authority to accept non-member deposits, 23% offered secondary capital accounts, and 45% had applied for grants and low-interest loans from the NCUA.
Of note, roughly one-third of low-income credit union (LICU) respondents said they had applied for CDFI certification using the NCUA’s streamlined process, which the agency has since announced it is terminating.
Some Challenges Reported
Some LICU respondents reported challenges related to retaining their low-income designation. Although most respondents (59%) said they were not at risk of losing their low-income designation, others noted that newly reported census information -- that an individual must earn 80% or less of the median family income for the metropolitan area where they live or the national metropolitan area -- could put their LICU status at risk, NAFCU said.
In addition, non-CDFI respondents shared their perspective on future plans to obtain the certification, noting barriers that had made the certification process challenging. Among respondents who said they were either currently pursuing or had has previously pursued a CDFI certification, 32% said that the complexity of the CDFI certification process was an obstacle.
Plans for the Underserved?
NAFCU said respondents were also asked whether they were considering adding an underserved area. More than half of respondents (52%) indicated that if the Federal Credit Union Act were amended to allow all federally-insured credit unions, regardless of type, to add underserved areas to their field of membership they would be much more likely to request this type of addition.
House Financial Services Committee Chairwoman Rep. Maxine Waters (D-CA) last month introduced credit union-supported legislation that would make changes to the FCU Act to allow all types of federal credit unions to add underserved areas to their FOM.