Time To Reassess

By Michael E. Fryzel, NCUA

The end of the year is usually the best time to look back, review accomplishments, reevaluate goals and objectives and reassess a game plan as you move forward.

2012 has been a good year for most credit unions. Through the third quarter, credit union net worth grew 6.4 percent to $104.5 billion from $98.3 billion at the start of the year. Industry total assets increased 5.3 percent to $1,012.9 billion from $961.7 billion in the same timeframe, as total savings rose 5.1 percent to $869.7 billion from $827.4 billion.

Credit union investments, cash deposits, and cash equivalents rose 7.5 percent to $378.7 billion from $352.1 billion during the first nine months of the year. Total loans were on the rise and expanded by 3.4 percent to $591.1 billion, up from $571.5 billion. Lending has now increased for six consecutive quarters. Additionally, credit union net income for the first three quarters of 2012 climbed to $6,351.2 million, exceeding the industry’s total 2011 earnings of $6,275.8. However, our economic recovery still has a ways to go and there will be challenges to face in the coming year.

NCUA has tried to lessen the regulatory burden with changes in numerous regulations to allow credit unions to better serve their members and not be constrained by over excessive government requirements. We have carefully listened to industry comments and concerns about proposed regulations and responded requesting additional information and are withholding final action. In addition, the new National Supervision Policy Manual will ensure fair and consistent examination procedures across the country, improving the exam process with the goal of making it fair and equitable.

So there has been some improvement and good things for credit unions as we look back over the year. But there have been some setbacks and struggles. Congress has not yet approved an increase in member business lending and the prospects of its approval in the near future aren’t bright. Legislation to permit supplemental capital for all credit unions is still a ways off.

Perhaps it’s time to not forget those progressive initiatives but place them on the back burner and reassess.

What do credit unions really need to compete as not-for-profit cooperative financial institutions in the 21st century? What enhancements could be made to the federal credit union charter that will allow for growth, advancements in member service and further improve credit unions stature as the premier financial services movement in the country?

Perhaps that should be the challenge to credit unions and the national organizations that represent them. Together, they should develop a strong legislative program that will contain credit union enhancements clearly showing that they will improve financial services and products for the citizens of our country. They should work together and in tandem to develop a sound legislative program to be presented to Congress early in the new session.

 

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NCUA has tried to lessen the regulatory burden with changes in numerous regulations to allow credit unions to better serve their members and not be constrained by over excessive government requirements.

Michael Fryzel

Michael Fryzel

Michael Fryzel is the former Chairman of the National Credit Union Administration and is now a financial services consultant and government affairs attorney in Chicago. He can be reached at ... Details