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State charters outpace FCUs in membership growth: NASCUS

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Despite shrinking net incomes and tighter margins, state-chartered credit unions outpaced their federal counterparts in some metrics during the first quarter, according to a recent analysis.

Lucy Ito, president and CEO of NASCUS
Lucy Ito, president and CEO of NASCUS

Membership at state charters rose at a faster pace than federal charters, according to the National Association of State Credit Union Supervisors, with state credit unions seeing a 1% increase during the first quarter compared with 0.6% for their federal counterparts. Membership at state-chartered credit unions now exceeds 59.2 million.

The trade group’s analysis includes data from privately insured credit unions as well as federally insured. NCUA data released last week only covers federally insured institutions.

NASCUS also reported that state charters saw roughly 4.3% asset growth during the first quarter, putting total state system assets at $815 billion, or 49.2% of the industry’s total assets, despite accounting for just 38% of all institutions.

NCUA’s data shows state charters consolidating at a slower rate than federal charters, with a 2.3% year-over-year reduction in the number of state-chartered credit unions compared with a 2.8% decline for FCUs. Nearly every year since 2011, the number of credit unions converting from a federal charter to a state charter has exceeded the number of institutions converting from state to federal.

“The state credit union system and dual-chartering both stood as vibrant contributors to an overall strong credit union movement at the end of the first quarter,” NASCUS President and CEO Lucy Ito said in a recent email. “There is no doubt the impact of the COVID-19 pandemic will be felt by all credit unions and reflected in the next quarter’s numbers. However, the state system and all credit unions clearly entered the second quarter in solid shape, which positioned most credit unions to quickly pivot in response to the unique challenges of the second quarter and remainder of this year.”

More info on first-quarter trends can be found here.

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