Large CUs Shielded from Some of the Damage

Measuring the pandemic’s impact:
By Aaron Passman

The pandemic has impacted credit unions of all sizes, but institutions below $1 billion in assets have seen a disproportionate share of the damage.

In every asset class under $1 billion, membership, loan balances and net worth decreased in the year ending June 30, according to NCUA’s data. Those are consistent with long-running trends for many institutions on the lower end of the asset spectrum, but these latest results are notable for the uniformity of losses across multiple asset groups. In the year ending June 30, 2019, for example, credit unions in some of categories experienced declines in membership but gains in lending. Not so for the second quarter of 2020.

Large credit unions – which account for just 7% of total institutions but 70% of industry assets – saw sizable gains across a variety of metrics. Net worth and loans at CUs of $1 billion or more were up by 12% while membership rose 10.2%.

Forty new institutions also joined the $1 billion-asset club in the year ending June 30, an increase of 12.6%.

Larger credit unions may have been protected from some of the problems their smaller counterparts experienced because of greater likelihood to offer mobile banking services, including loan originations, along with a more diversified field of membership, which kept those institutions better protected if certain segments of their member base lost work due to shutdowns.