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Whether it is 1% ROA, 10% capital, or a delinquency ratio under 1%, there are some numbers credit unions think they have to hit. It’s time for these longstanding, mythical benchmarks to be revisited.

Kudos to NCUA for coming out in a recent letter to credit unions to put falling ROA into perspective, and hopefully easing credit union fears of not hitting the magical 1%. NCUA said that 1% ROA should not be a benchmark to ensure a CAMEL 1 rating, and that credit unions’ strong capital position makes an ROA below 1% easier to swallow. It also pointed out the economic effects that shrinking net interest margins are having on ROA.

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