ATLANTA, Ga. (6/18/12)--Low-income credit unions (LICUs) are national trendsetters that are leading other lenders in loan growth while simultaneously strengthening their safety and soundness, National Credit Union Administration (NCUA) Chairman Debbie Matz said in a Friday speech before the National Federation of Community Development Credit Unions' annual conference.
Matz in her speech said that LICUs, which serve 6.6 million Americans, are lending more than other types of financial institutions, having expanded their loans by $11 billion between December 2007 and March 2012. This represented a 57.6% increase. Loans made by banks and thrifts declined, overall, by 6.3% during that same period, Matz noted.
LICU lending has increased steadily over the last four quarters, increasing by 4.6% in the first quarter of 2012, Matz added. Loan balances at banks and thrifts declined by 0.8% during the same time, she said.
Many of the key financial indicators for LICUs have also improved recently, and they posted a net worth ratio of 10.25% in the first quarter of 2012. Return on average assets has nearly doubled, charge-offs have fallen by around 30%, and delinquencies have held steady since late 2009, she added.
"The collective success of low-income credit unions demonstrates that credit unions can do well while serving people of modest means," Matz said.
She also highlighted NCUA's work to buttress the efforts of LICUs, including providing more strategic planning consulting, offering a wider range of assistance, revamping loan and grant programs, and extending the reach of the agency's Office of Small Credit Union Initiatives (OSCUI).
The OSCUI also supports small credit unions by offering grants and loans to eligible credit unions, Matz said.
The 1,119 designated low-income credit unions can still apply for up to $25,000 in grants and $300,000 in loans to help support their financial literacy, staff and board member training, internship, and tax prep assistance efforts through the agency's Community Development Revolving Loan Fund (CDRLF).
The NCUA will continue to accept CDRLF applications until June 29. A total of $1.3 million in funds is available for grants this year. Eligible credit union loans will be disbursed from a pool of $11 million.