By David Adams
It’s a new year and like any organization, MCUL & Affiliates is taking a look at its strategies and plans to make sure we’re on the right track. To that end, MCUL COO Ken Ross and I have been traversing the state to get your input on what you need from us in 2014.
With the worst of the economic crisis behind us, the year is shaping up to be a good one. But we know there are still challenges ahead, particularly for small-asset credit unions.
Quarterly NCUA Call Report data indicates that SAS credit unions lag in loans and deposits, and their loan-to-deposit ratios continue to be under 50 percent. And more than half of all credit unions under $20 million in assets lost money in 2013.
At MCUL, we’re always trying to make sure we are doing all we can to support you. Credit unions large and small are dealing with many pressures – from regulations to new technologies to declining income. Also, our industry faces challenges including federal tax reform, retailer security breaches and ever-expanding compliance burdens. But there are a lot of good things going on too, such as improved earnings and capital adequacy and overall industry growth in membership and loans. Our mission at MCUL & Affiliates is to help the industry make the best of good and minimize the impact of the bad.
We invite you to take advantage of a variety of resources specifically designed to help smaller credit unions. MCUL offers a series of training sessions geared toward small credit unions, as well as advertising support through the CU Link campaign, educational and operational support from the Michigan CU Foundation, free strategic planning upon request and the CU Assistance Fund to support financially challenged credit unions.
But we know there is more we can do. We encourage you to reach out to let us know what we can do to better support your efforts. Hearing from you helps us make sure our agenda meets your needs. Please feel free to work through your league representative or contact me directly.
Despite the challenges, there are some positive trends for the industry. According to MCUL’s analysis of the NCUA Call Reports, there were a number of improvements through Sept. 30. While we went over this information in greater detail in the January Priority Report, it is worth noting that overall capital adequacy and earnings continue to improve, although larger credit unions are seeing the majority of the increases. Net charge-offs continued to decrease. Delinquencies continued to fall, finally dipping below 1 percent, indicating that credit unions are well positioned to take on additional lending risk.
Membership continues to grow at a fast rate, up 44,000 in the third quarter alone. That tells us that our CU Link campaign is having the desired impact. We continue to ask that all credit unions consider making their fair-share contribution so we can do even more to tell consumers the good news about credit unions.
Deposit market share is up, even as the state’s banks also return to a healthier position. New and used auto loan balances continue to grow, partly because of the resurgent auto market, but also because more consumers are realizing the benefits of doing business with credit unions.
In fact, our annual consumer awareness survey shows a dramatic shift in consumer awareness since we started doing the survey in 2004. Much of this can be attributed to our growing cooperative advertising program.
You may be part of a small credit union, but we want you to know that your voice is still critically important in our grassroots efforts to reach out to lawmakers as well as regulators. Your stories resonate with those who make and implement laws and rules that govern our industry. That’s why it is critical for you to take part in events such as the CUNA and Michigan GACs, Capitol Day, legislative breakfasts and Hike the Hill. Most important is protection of the federal credit union tax exemption, but we are fortunate that Michigan’s entire 16-member congressional delegation has either offered their statements of support for our tax exemption or for credit unions in general.
While we continue to advocate on behalf of credit unions on well-known issues such as changes in mortgage rules and holding retailers accountable for missteps such as the Target data breach, we want to hear about what else we can do to support you. For example, we recently saw a new law on card-skimming devices signed by Gov. Rick Snyder. This issue was brought to our attention by a credit union. It’s a great example of how one person’s input can positively impact our entire industry.
In addition to your time, contributing your financial resources is also important. Our PAC fundraising efforts will continue this year, and the new issue advocacy fund called A Stronger Financial Michigan seeks investment from each credit union to fund advertising and other efforts on issues of vital importance. Your 2014 affiliation packet included information about this “war chest” for political battles, along with a contribution request on your 2014 System Support Invoice.
As you know, a major part of our strategy is our robust offerings from CU Solutions Group, an MCUL subsidiary. These for-profit business lines support credit unions with products and expertise at a low cost. Supporting CU Solutions Group allows your dollars to come full circle. Our business model is for profits from CUSG to help fund activities and services provided by the league, which allows Michigan credit unions to enjoy the lowest dues of any state in the country. In addition to the lower dues, CUSG helps to fund the CU Link awareness campaign, A Stronger Financial Michigan issue advocacy fund and the Credit Union Assistance Fund.
Once again, it all adds up to another busy year for MCUL as well as Michigan credit unions. We hope that you will take advantage of opportunities provided by the league to network with your lawmakers, attend education sessions and contribute to our extensive cooperative advertising program.
I also invite you to help us identify challenges you face. I welcome your comments, questions and support throughout the process. We can’t do it without you.