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Credit unions fear that the NCUA’s decision to levy premium to shore up the NCUSIF will result in an already difficult year becoming even worse.That’s the findings of a survey that NAFCU took for its March Flash Report.NCUA’s decision to levy a premium has caused 70% of credit unions surveyed by NAFCU to adjust their growth predictions downward.According to the report, 97.7% of those surveyed said their predictions for net income growth had been affected by the premium announcement, and 2.3% said their prediction on asset growth was affected.The NCUA plan to stabilize corporate credit unions, which was approved two days after U.S. Central announced it was expecting a $1.1 billion loss for 2008, involved a $1 billion capital injection into U.S. Central and a guarantee of all deposits by natural person credit unions in corporate credit unions.The agency has projected that the average cost to credit unions will be a 62-basis-point return on assets and a 56-basis-point return on net worth ratio.NAFCU’s survey found that 80.6% of respondents were expecting a decline in net income growth this year, 14.9% were expecting an increase and 4.5% expect no change.On asset growth, 34.3% expected an increase, 34.3% expected no change and 31.3% expected a decline.A plurality of respondents expected a decline in loan growth this year.The NAFCU survey found that credit unions were most likely to talk to members about the premium assessment via letter (34.3%). Other methods of communication cited included a pamphlet (20.9%), e-mail (19.4%), personal visit (11.9 %) and phone call (11.9%).The projections of tough times ahead come in the wake of mixed results in the last few months, for the credit unions surveyed.Share growth increased 1.8% in January, up from 0.5% in December. NAFCU projects overall share growth for 2009 will be 6%, compared with 7.7% last year.Among survey respondents, first-mortgage lending grew 0.08% in January, compared with 0.4% in December.Month-to-month new vehicle lending decreased by 0.03% and used-vehicle lending increased by 0.04% in January, according to the Flash Report.–cmarx@cutimes.com

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Peter Westerman

Credit Union Times

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