Expenses related to inactive members coupled with low deposit rates could slow membership growth for the remainder of the year.
The August Credit Union Trends Report from CUNA Mutual Group showed membership at an estimated 92.8 million at the end of June, the latest period tracked. CUNA reported strong membership gains in June at 296,000 versus an average of 97,000 for the previous five months. The growth, however, is fairly consistent at 1.1%, according to CUNA Mutual Chief Economist Dave Colby. The industry is still on track to have 93 million members by the end of the year.
Until then, CUs may face limited funds for marketing and as a result, will continue to actively manage membership rolls including expenses related to inactive members, Colby noted.
"When these trends are combined with very low deposit rates [as a result of] no rapid growth due to rate shoppers joining credit unions, we anticipate membership gains in the second half of 2010 to be muted at best."
The nation's largest CUs are and will continue to dominate membership growth, Colby said, adding the industry should expect a large share of CUs to post membership declines in their NCUA Mid-Year Call Report data.