ARLINGTON, Va.-With federally insured CUs dropping below 7,000 in number, NAFCU and CUNA were quick to point out the drop is due to consolidation and has very little to do with CU failures, which has been a much bigger issue among banks.

"Even though there is about the same number of banks as there is credit unions, there have been more bank than credit union failures in recent years," pointed out NAFCU President Fred Becker (see chart). "Last year 16 credit unions failed compared with 92 banks. Through June 2012, 12 credit unions have failed and 39 banks have failed."

Becker also pointed out that credit union delinquencies, charge-offs, and many other performance categories are stronger than banks'. "In the bigger picture, what credit unions need to recognize is that, yes, there are some heavy seas out there, but they are heavier for banks."

CUNA spokesperson Pat Keefe, too, noted banks are going under faster than CUs. "Since mid-year 2007 to mid-year 2012 failures have been a much bigger contributing factor to the decline of the bank numbers-one in three, compared to less than one in 10 for CUs."

Keefe said that in those time spans 1,436 credit unions have gone away with 129 due to involuntary liquidations or assisted mergers. During the same period, 1,368 banks went away, with 457 attributed to failures.

David Bartoo, President of Merger Solutions Group, Forest Grove, Ore., pointed to an "interesting" trend-the rise of distressed CU mergers and the fall of CU merger volume.

"While there are still large mergers happening, the volume of small to tiny credit unions getting pushed out of the industry has picked up significantly. We predominately have two groups of clients: those that are on the edge of distressed, under LUA, or those that are in very solid financial condition that are merging out before they lose value and leverage."

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