Steve Rick - Small CUs Beating Big CUs In Key Performance Area

MADISON, Wis.—The current rate environment, for a change, may actually be favoring small CUs, data from TruStage’s latest Trends Report show.

The September Trends Report, which is based on CU performance through July, reveals the credit union return-on-asset ratio fell to 0.66% in the first six months of 2024, on an annualized basis, down from 0.78% in the first six months of 2023.

The 12-basis point decrease in earnings during the last year was driven by a 15-basis point increase in provisions for loan losses as a percent of average assets, and a 7-basis point increase in operating expense ratios, the report states.

Higher Earnings

Partially offsetting the expense increase was a 3-basis point increase in net interest margins and a 6-basis point increase in fee and other income ratios. Credit unions with assets greater than $50 million reported a drop in earnings while smaller credit unions reported higher earnings due to the difference in the increase in their cost of funds ratios.

Steve Rick

“For example, billion-dollar credit unions saw their cost of funds ratios rise from 1.33% during the first half of 2023, to 2.03% in the first half of 2024, a 70-basis point increase. Meanwhile, credit unions with assets less than $20 million saw their cost of funds increase from 0.45% in 2023 to 0.81% in 2024, a 36-basis point increase,” wrote TruStage Chief Economist Steven Rick. “This cost of funds disparity is due to bigger credit unions relying more on higher-cost money market and certificates of deposit accounts for funding. So, for the first time in many years, these smaller credit unions reported a return-on-asset ratio similar to the billion-dollar credit unions.”

Membership Growth

Aside from rates, small shops continued to struggle, particularly with membership growth. Credit union memberships grew 0.1% in July 2024, below the 0.4% reported in July 2023, due to a significant reduction in auto loan originations and slower job growth. On an annual growth rate basis, memberships are up only 1.2% in the year ending in July 2024, below the 4.3% pace set in the year ending in July 2023. ‘

“This 1.2% pace is the slowest since the tail end of the Great Recession in November 2011. The membership growth slowdown was partially driven by the 2.4 million jobs gained during the last year, according to the Bureau of Labor Statistics, which is below the 3.2 million jobs gained in the year ending in July 2023,” Rick wrote.

The slowdown in membership growth in 2024, compared to 2023, was seen across the board. Most credit unions with less than $100 million in assets reported negative membership growth while credit unions with assets greater than $1 billion reported relatively strong membership growth of 3.8% due to organic growth and mergers.

“Credit unions should expect membership growth around 1.5% in 2024, and a slightly better 1.8% membership growth is forecasted for 2025 as loan growth picks up,” Rick said.

Comments

TruStage To Launch TSDA, Bringing Stablecoin Infrastructure To Community FIs

MADISON, Wis.— TruStage Tuesday today announced the planned launch of TruStage Stablecoin (TSDA), a fully reserved U.S. dollar stablecoin. At its core, TSDA is designed to broaden access to digital payment infrastructure for community-based financial institutions, TruStage explained. “A trusted partner of credit unions for more than 90 years, TruStage currently works with more than 93% of 4,300+ credit unions nationwide, which collectively hold more than $2 trillion in assets. TruStage Stablecoin will be among the very first stablecoins specific to community based financial institutions and is supported by decades of industry relationships, financial strength, and operational excellence,” TruStage said. “In my career working with credit unions, I’ve never witnessed the level of engagement surrounding any technology advancement similar to what I’m seeing with stablecoin solutions right now,” said Brian Kaas, president and managing director of TruStage Ventures, the venture capital arm o...

Read Complete Article HERE>»

Sunday Reading - Where Beatniks Come From

Where Beatniks Come From An introduction to the Beat Generation The Beat Generation was an American literary movement that rose to prominence in the 1950s. A loosely affiliated collection of poets, novelists, playwrights, publishers, and other artists reacted to what they considered an anti-intellectual and homogeneous social order following World War II. The writing of the Beat Generation used experimental forms, surreal imagery, and vernacular language, and emphasized the importance of " spontaneous prose " to mimic the improvisation of jazz. Although the Beats praised canonical poets like William Blake, Arthur Rimbaud, and Walt Whitman, much of their work sought to rebel against literary tradition. The Beats' radical politics and nonconformity influenced several subsequent countercultural ...

Read Complete Article HERE>»

GAC 2026: In Debut GAC Speech, Simpson Calls On Movement To Protect Cooperative Model

WASHINGTON—America’s Credit Unions President and CEO Scott Simpson told attendees at the 2026 Governmental Affairs Conference that what’s truly at stake in Washington isn’t just policy — it’s the “transformational experiences” credit unions create in people’s lives every day. Scott Simpson addresses the meeting. Credit unions exist—Simpson reminded the record crowd as he delivered his first GAC address as ACU’s leader—because Congress chose nearly a century ago to expand access to financial services for Americans who were being left behind. The Federal Credit Union Act wasn’t about creating another financial institution model — it was about ensuring middle America could be served. That mission remains intact, but Simpson warned it cannot be taken for granted. For years, Simpson said he has asked credit union leaders a simple question: Why do credit unions exist? The typical answer — that they are not-for-profit financial cooperatives — is true, but incomplete. Credit unions and their t...

Read Complete Article HERE>»

Economic and Industry Issues

Weekly News Summary - July 30, 2020 Press Release For Immediate Release Weekly News Summary Hello NCOFCU Members, Here are some things that were in the news last week. Please share these articles with your Supervisory Committee and Board of Directors. If you missed previous editions of the weekly news, summaries of those can be viewed at our archive . Have a great week! Mike Richards, CPA The Callahan Credit Union A...

Read Complete Article HERE>»

As Expected, Fed Opts Not to Raise Rates--But Says It May in Future

WASHINGTON–As expected, the Federal Reserve has adjourned its meeting here without raising rates, but it also indicated it could again do so in the future. The decision means rates remain at a two-decade high. The adjournment without action marks the second consecutive meetings at which the Fed has not raised rates, it the longest period without an increase since it began to lift rates from near 0% in March 2022. In announcing it would maintain the Fed Funds rate at a range of 5.25% to 5.50%, the Fed said in a statement that recent indicators suggest economic activity expanded at a strong pace in the third quarter, job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated. ...

Read Complete Article HERE>»

IRS Rules Turn ‘Simple’ Auto Loan Tax Break Into Compliance Challenge

PLANO, Texas— A new federal tax deduction allowing consumers to deduct interest on qualifying auto loans is being billed as a borrower benefit, but newly issued regulations from the U.S. Department of the Treasury and the Internal Revenue Service show the program will impose significant compliance and reporting obligations on credit unions and other auto lenders. That’s the assessment of Brian Turner, president and chief economist with Meridian Economics, who said the rules governing the so-called auto loan interest deduction are “far more technical” than initially described and will require system and process changes for many finance providers, including credit unions active in indirect and direct auto lending. Deduction Comes With Detailed Conditions Brian Turner Under the proposed regulations, interest is deductible only if the loan and vehicle meet strict criteria. The vehicle must weigh less than 14,000 pounds, be designed for public road use, be newly placed in service by t...

Read Complete Article HERE>»

CU Board Modernization Act Passes House

Backed by NAFCU and CUNA, the legislation would reduce the number of times CU boards must meet each year. By Michael Ogden | September 30, 2022 at 01:00 PM U.S. Capitol building, Washington, D.C. (Source: Shutterstock) The House of Representatives passed the Credit Union Board Modernization Act on Thursday, the fate of which goes to the Senate, where a similar version was introduced in May. The bill would alter the Federal Credit Union Act’s requirement that federally charted credit unions meet 12 times each year and reduce that number to a minimum of six times each year. For months, CUNA and NAFCU officials have backed the bill , along with representatives from the California and Ohio Credit Union Leagues. “This bill would provide a needed update to credit union board meeting requirements, freeing up time and resources that can be dedicated to meeting members’ needs,” CUNA President/CEO Jim Nussle said. “We thank Reps. Var...

Read Complete Article HERE>»

The NCUA just published its stablecoin playbook: Here’s what credit unions need to know

The National Credit Union Administration (NCUA) has begun answering a key question for credit unions since the GENIUS Act became law last July: What is the stablecoin licensing process? On February 11, 2026, the NCUA published a 22-page proposed rule , "Investments in and Licensing of Permitted Payment Stablecoins Issuers," in the Federal Register. This document outlines the framework for credit union participation under the new Act. The NCUA has a deadline of July 18, 2026, to finalize this rule. Here’s what credit unions need to know now. Quick background: The GENIUS Act and the NCUA’s role The GENIUS Act designated the NCUA as a primary federal regulator of stablecoin, alongside the FDIC, the OCC, and the Federal Reserve. Credit unions can't issue stablecoins directly; they must operate through subsidiaries, typically CUSOs, that apply for and obtain an NCUA-issued Permitted Payment Stablecoin Issuer (PPSI) license. The newly proposed rule covers the application and l...

Read Complete Article HERE>»

James Hunter, Executive Director of Credit Union Development for New Orleans Firemen’s CU, knows too well how expensive it is to be poor.

NEW ORLEANS FIREMEN’S FCU 􀀁 METAIRIE, L A passion for empowerment James Hunter knows too well how expensive it is to be poor. It’s what he sees every day as mortgage director and executive director of credit union development for $182 million asset New Orleans Firemen’s Federal Credit Union, Metairie, La., and executive director of The Faith Fund, a nonprofit partnership that seeks to provide a financial hand-up to the undeserved. It’s what inspires him to come to work every day and drives his passion of empowering people and setting them on the path to financial security. “Too many people are too far away from the starting line,” Hunter says. “Payday loans are a big business in Louisiana. Exorbitant fees and interest from payday loans drain more than a quarter of a billion dollars a year. Baton Rouge supports one of the top three pay-day loan markets in the U.S.” The Faith Fund was formed to counteract that. It’s a unique cooperative relationship between like-minded busi...

Read Complete Article HERE>»

What Trump’s ‘one big beautiful’ tax-and-spending package means for your money!

Trump’s megabill will bring sweeping changes for household finances. President Donald Trump signed his “one big beautiful” tax-and-spending package on July 4 — legislation that will bring sweeping changes to Americans’ finances. After the Senate passed its version on July 1, the House Republicans on July 3 voted to approve the multi-trillion-dollar domestic policy legislation and send it to Trump’s desk for signature. The final bill makes permanent Trump’s 2017 tax cuts while adding new relief, including a senior “bonus” to offset Social Security taxes and a bigger state and local tax deduction . The plan also has tax breaks for tip income , overtime pay and auto loans , among other provisions. The GOP’s marquee legislation will also enact deep spending cuts to social safety net programs such as Medicaid and food stamp benefits, end tax credits tied to clean energy an...

Read Complete Article HERE>»

First-responder Credit Union Newsroom

Search This Blog