WASHINGTON — NAFCU's most recent Flash Report survey confirmedthat 74% of credit union respondents felt the recent datacollection effort by the NCUA, known as the Member ServiceAssesment Pilot Program, was an inappropriate expense and shouldnot be expanded as currently structured.

In 1934, credit unions were organized to serve those of modestmeans. Recently, the modest means definition has come underscrutiny by the Government Accountability Office, Congress, and thebanking industry.

Back in 1999, former Chairman of the Senate Banking CommitteePhil Gramm noted that credit unions were consistent in servingtheir communities. February's NAFCU Flash asked participants ifthey felt credit unions continued to serve their communities; 91%said yes.

Even though the Flash survey found that 91% of respondentsbelieved that CUs continued to follow the charter, former Chairmanof the Senate Ways and Means Committee Bill Thomas (R-Calif.)requested the NCUA provide tangible evidence credit unions werecontinuing to serve the underserved.

In response to Thomas' request, NCUA undertook a data collectioneffort in 2006. NCUA's MSAP surveyed the membership attributes ofFCUs.

While NAFCU's Flash Report found Gramm's comments valid, theMSAP staff recommendations included continued data collection. NCUABoard Member Gigi Hyland is wrapping up the results of the TownHall meetings held throughout 2007 seeking to gather CU input inline with the MSAP suggestions.

The MSAP survey taken by NCUA cost approximately $1.1 milliondollars and 74% of Flash respondents questioned the NCUA surveyexpense.

NAFCU's Flash Report also examined prominent economic indicatorswith NAFCU economists echoing the Federal Reserve predictions. Ashas been widely reported, the housing market has continued todecline. NAFCU economists predicted that across-the-boardimprovements in the housing market are not likely until sometime in2008. Among the issues that will affect credit unions in 2008 aremortgage loan origination fees, which are going to decline, theNAFCU report said.

NAFCU reported that vehicle sales took a sharp drop in January,continuing the downward trend. According to the report, sales forall the “Big Six” manufactures were down. Dr. Tun Wai, chiefeconomist at NAFCU said, “Consumers' demand for big-ticket itemscontinues to be dampened by low consumer confidence, high energyprices, a weakening labor market, declining home equity, and lowercredit quality.”

Decreased vehicle sales will also impact credit unions with adecline in new vehicle lending. Economists at NAFCU expect newvehicle lending to be sluggish throughout 2008. Credit unionsresponding to the report also expected new-and used-vehicle loansto decline.

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