NCUA Q4 2023 Data: Slowed Growth During Consumer Challenges
According to the National Credit Union Administration (NCUA)’s year-end 2023 data, despite generally favorable economic developments, national credit unions faced notable challenges during 2023. NCUA’s Q4 call report reflects slower membership gains and loan growth, while liquidity remained tight and asset quality deteriorated.
In addition, earnings challenges were more obvious during the year, although the movement’s net worth ratio held steady, starting and finishing the year at 10.7%.
America’s Credit Unions attributes reduced borrowing to high market interest rates, asserting confidence in the movement’s resources to serve millions of members in the face of financial challenges. Chief among those challenges is high inflation, which the Federal Reserve continues to attempt to control.
Inflation, measured by the Consumer Price Index, eased with price increases settling in at 3.3% over the year ending December. That was lower than the 3.7% 12-month increase reported at the end of September and well below the 6.4% annual increase recorded in 2022.
Overall, credit union memberships increased by 2.9% in 2023 – down from 4.3% in 2022. Still, the 2023 increase in memberships was roughly six times higher than the 0.5% Census Bureau estimate for U.S. population growth during the year.
In Michigan, memberships grew by 0.4% last year, which is down from the 2.7% reported during 2022.
Q4 membership growth by region (for trailing 12 months):
- Alpena: 13.1%
- Detroit: 3.4%
- Flint: 0.1%
- Grand Rapids: 4.1%
- Lansing: -4.2%
- Marquette: 2.7%
- Muskegon: -0.5%
- Traverse City: 4.2%
Michigan credit union loan portfolios increased by 8.7%, year-over-year, which is above the national rate of 6.2%.
Q4 loan growth by type (for trailing 12 months):
- Member business loans: 26.9%
- New auto: -0.9%
- Used auto: 2.8%
- Credit cards: 10.5%
- First mortgage: 7.3%
- HEL & 2nd Mtg: 19.5%
- Other unsecured loans: 16.6%
Loan growth by region (for trailing 12 months):
- Alpena: 7.7%
- Detroit :-5.6%
- Flint: 10.4%
- Grand Rapids: 14.9%
- Lansing: 1.9%
- Marquette: 14.0%
- Muskegon: 5.7%
- Traverse City: 7.1%
America’s Credit Unions’ Q4 Member Benefits Report for 2023 shows that Michigan credit unions contributed a total of $1.02 billion in direct financial benefits to Michigan’s nearly 6 million members over the previous twelve months. This is significantly higher than the previous quarter’s report of $762 million.
These benefits translate to $172 per member or $361 per household. These figures are calculated based on average savings differences between credit union and bank pricing. They result from financial benefits, such as higher CD rates and fee-free checking, as well as lower rates and fees on products like home and auto loans.
That means, according to America’s Credit Unions, credit union members financing a $25,000 vehicle for five years will save an average of $87 per year in interest when compared to banking institutions.
“The NCUA’s year-end data displays slowed credit union earnings in the face of consumer challenges, coinciding with a dip in state and national membership growth. This tells us that awareness will need to continue being a priority for the movement going forward,” said Michigan Credit Union League President/CEO Patty Corkery. “While I am proud of the $1 billion in direct financial benefits Michigan credit unions contributed to members, the latest call report shows us that we need to continue sharing the credit union difference and telling our story to consumers.”
Find the complete Q4 2023 NCUA Call Report Data here.
You can also find more Q4 data on Michigan credit unions’ low rates and high dividends in America’s Credit Unions’ Q4 Member Benefits Report.
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