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NCUA: 2012 A 'Transformative Year' for CUs
ALEXANDRIA, Va. (5/15/13)--The credit union system in 2012 "transitioned from uncertainty caused by a severe recession and benefited from a recovering economy," making last year "a transformative year" for credit unions, the National Credit Union Administration said in its 2012 Annual Report.

This "transformative year" bore significant results: Credit union system assets exceeded the $1 trillion threshold for the first time, membership rapidly grew to 94 million, and the aggregate industry net worth ratio increased to 10.44%, the NCUA said.

Credit Union National Association Deputy General Counsel Mary Dunn said, "This report demonstrates clearly the health of the credit union system and supports CUNA's view that new, universally applied safety and soundness regulations are not needed."

Net credit union income totaled $8.5 billion at the end of 2012, and the return on average assets ratio for credit unions totaled 86 basis points. Loan charge-offs declined to 0.73%, the NCUA wrote.

Credit unions with more than $250 million in assets saw the strongest growth. While smaller credit unions tended to have higher net worth, they lagged behind in other areas, the NCUA reported. Credit unions with assets of less than $10 million "sustained sluggish loan growth compared to credit unions with assets above $250 million" and "struggled to generate earnings and lost membership overall," the agency added. The NCUA's Office of Small Credit Union Initiatives is working to help small credit unions survive hardship, the NCUA noted.

The report also detailed how the agency worked to:

  • Ensure a safe and sound credit union system;
  • Modernize regulations;
  • Continue corporate credit union system resolution efforts;
  • Engage, assist and coordinate with stakeholders; and
  • Position the NCUA for the future.
Interest rate risk, liquidity risk, cyberattacks and an aging membership base outside of its prime borrowing years are among the most pressing risks to credit unions going forward, the agency said.

The report serves as the agency's official report to the president and Congress, and covers NCUA and credit union operations. The report also tabulates 10 years of financial trends for credit unions and the National Credit Union Share Insurance Fund.

For the full NCUA report, use the resource link.

CUNA's Examination and Supervision Subcommittee will be reviewing the report and following up on issues of concern.
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