NAFCU releases first-ever Credit Union Sentiment Index
WASHINGTON, DC (June 13, 2017) — The National Association of Federally-Insured Credit Unions (NAFCU) on Monday released its first-ever Credit Union Sentiment Index, which shows general optimism among the participants about continued loan and membership growth but concerns regarding regulation.
“The survey will be available to members each month and NAFCU encourages credit unions to participate,” said NAFCU Chief Economist and Director of Research Curt Long. “Credit union responses to the sentiment index will provide NAFCU members, legislators and regulators with a simple and easy-to-understand measure of industry conditions from credit unions themselves.”
The index is based on responses to eight questions addressing growth and earnings outlook, lending conditions and regulatory burden. The index can range from 0 to 100; a score over 50 indicates a generally positive or optimistic outlook.
The overall index from the first survey is 58.3. A summary of scores is as follows:
- Credit union respondents scored growth at 73. When asked to provide reasons for their score, credit unions noted optimism about the economic outlook, followed by loan demand and regulatory burden.
- Credit union respondents scored earnings at 70. Though credit union return on assets has been on a “mild downward trend,” according the index, respondents were positive when asked about their earnings conditions. The biggest reason for respondents’ earnings outlook was their economic outlook, followed by loan demand and interest rate outlook.
- Similar to earnings, credit union respondents scored their lending outlook at 70. The lending component score is an average of two sub-components: loan demand (68) and applicant quality (71).
- Credit union respondents scored regulation burden at 20. The regulation component is an average of two subcomponents: the perception of current regulatory burden versus one year ago (18) and the expected change in regulatory burden one year from now (22).
- The overall score of this initial sentiment index is 58.3. “The prolonged era of robust growth is reflective of credit unions’ prudent business model, which allowed for a speedier recovery from the financial crisis, and the appeal of the not-for-profit, cooperative model as an alternative to big banks,” the index noted.
The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go to www.nafcu.org or @NAFCU on Twitter.