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NAFCU's February "flash" report on financial trends gleaned from its regular survey of about 140 of its larger member FCUs indicates only "moderate" share growth ("year-over-year" basis) in recent months against a more robust loan growth for the same period, resulting in a February loan-to-share ratio at "almost historic highs."
According to NAFCU figures, total shares at the end of February grew at the rate of only 5.92% for the preceding 12 months while loans grew at 13.43%.
By comparison, in December 1999 the year-over-year share rate was 6.37% and in September 1999, it was 10.19%. Loan rates for the same periods were 13.47% and 12.41%.
The sample's annualized net charge-offs (as a percentage of total loans) for February (at .42%) decreased by three and five basis points respectively over the comparison periods, and February's bankruptcy rates decreased by two basis points (at .53%) over December rates but increased by one basis point over September's .52%.
In addition, of the 40% of "flash" respondents who said that they had experienced a savings "squeeze" in the past six months (mostly in IRAs), 46% pinned the blame on stock-based mutual funds' high rate of return. Twenty percent, however, cited increased rate competition from community banks as the culprit.
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NCUA's FOM task force, instituted over a year ago to monitor the implementation effects of the agency's new chartering manual (IRPS 99-1), appears ready to recommend a few noteworthy changes when it makes its report to the NCUA Board this June or July. Among them, according to FOM task force director Len Skiles-as reported in the Texas Credit Union League's newsletter, "The Lonestar Leaguer"-are an "express" chartering track for new CU formation that would not require a definitive business plan prior to obtaining the charter but would limit the FCU to "simple share accounts and small loans."
Skiles also reportedly said that an increase-from 200 to 500 potential members-in the maximum SEG size eligible for NCUA's "short" SEG application form is under active consideration, and that new common bond groups emerging as a result of any company restructuring may not have to go through the SEG application process in order to become FCU members.
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NCUA Board Chairman Norman D'Amours "member service" proposal (some call it "CRA-lite") for FCU's apparently is not dead, despite several board votes rejecting versions of the proposal over the past few years.
The die-hard D'Amours' outreach item resurfaced recently in a Federal Register (ital.) notice of NCUA's semiannual agenda of upcoming regulatory items.
Under the category of "proposed rule," regulatory item number 4283, entitled "Federal Credit Union Chartering, Field of Membership Conversions," is accompanied by a gloss saying, "The NCUA Board is considering issuing a proposal that would require federal credit unions to have a business plan that sets forth the credit unions' efforts to serve low-income members."
"The chairman has always had the feeling that he would bring it up again when the time was right," NCUA Director of Public and Congressional Affairs Bob Loftus said of the death-defying item. "It's more or less a placeholder." -
gmcorrigan@mindspring.com
