A 10-year look back at secondary capital

Interest in secondary capital is growing, and new strategies, larger loans, and NCUA decisions are changing the way credit unions deploy it.

Since the 1990s, the federal government has allowed low-income credit unions (LICUs) to accept non-member deposits and secondary capital, which gives credit unions a shot to their net worth and makes available new avenues to expand loan portfolios, assets, and services.

More than 40% of all credit unions held a low-income designation at midyear; however, only 70 reported using secondary capital. Even fewer institutions in credit union land have made secondary capital a foundational element in their mission to help members and stimulate the economies of the low-income communities in which they operate.

The following nine metrics draw from more than a decade of data from the 5300 Call Report as well as Callahan’s own Peer-to-Peer analysis tool. They highlight the impact secondary capital has on cooperatives and the members they serve.


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