MADISON, Wis. — With a month-only gain of 18,000 members, September experienced a slowdown in member growth.
According to CUNA Mutual Group's Credit Union Trends Report, the average monthly gain was 240,000 for January through August. The industry's member count is currently estimated at 90.2 million. This reflects a gain of 1.9 million members both year-to-date and over the past year, according to the report. These results remain well above trend as the average annual gain over the past 10 years was 1.7 million members.
"Weak gains in September are likely a harbinger of results through year end," said Dave Colby, chief economist at CUNA Mutual. "In three out of the past four years, credit unions reported membership declines in the fourth quarter. Culling of inactive members and conversions into non-credit union charters were the primary drivers of past 4th quarter weakness."
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Colby said looking forward, "it is unlikely that above trend growth is sustainable given increased competition for members' borrowing, transactional and savings business."
Meanwhile, CUNA's estimates showed 8,491 credit unions at the end of September as the rate of consolidation within the credit union system has definitely slowed in the first three quarters of 2007. Year-to-date, a decline of 171 institutions is well below same period 2006, the report noted, adding this trend is supported by NCUA's Insurance Report of Activity data that shows 2007 YTD mergers, 45 below the YTD 2006 data.
"As noted last month, there is little evidence supporting this slowdown in consolidation," Colby said. "Environmental factors indicate marketplace contraction should accelerate."
The net decline reported in September was 22 credit unions and this brought the year-over-year decline to 270 CUs. Colby said an indication of how dramatically consolidation has slowed is the September 2006 report that showed a year-over-year decline of 365 credit unions. Despite current near-term trends, CUNA Mutual anticipates a consolidation rate above 300 credit unions in 2008.
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