Glatt’s HealthScore Disputes First Quarter Hoopla, Especially for Small CUs
Credit unions celebrating first quarter financials that suggest an end to the industry’s recession woes should refrain from popping champagne corks, said consultant Tom Glatt Jr.
Wilmington, N.C.-based Glatt Consulting’s Credit Union HealthScore shows that not only did the first quarter 2013 score drop compared to one year prior, the data also reveals some long-term viability issues that could continue to drag on industry success.
“If you run Navy Federal, you have hundreds of thousands of members and you can spread your expenses among them,” Glatt said. “But if you’re a credit union with 1,000 members, you have fewer people to share fixed costs like technology.”
While the overall industry efficiency score is 85% - meaning, on average credit unions spend 85 cents to earn $1 – large credit unions have much lower scores than small ones. Small credit unions tend to score 90% or higher. Glatt said one small credit union has an efficiency score of 126%.