Credit unions are extremely concerned that largely unregulated fintech companies will pose a significant disruption to their institutions in the coming years NAFCU says in its Annual Report on Credit Unions.
“The vast majority of credit unions indicate that fintech companies could be ‘significantly’ disruptive to the current market, particularly because of changes in consumer preferences that favor fast, innovative and accessible technologies,” NAFCU said, in the annual report.
And many of those fintech companies remain unregulated—an omission that Congress must correct, NAFCU said.
“The rise of fintech providers underscores the need for Congress and regulators to modernize existing laws and regulations to address emerging technologies and new innovations,” the report said.
NAFCU said that according to its February economic and credit union survey, three-quarters of those responding said that they are very or somewhat concerned about the rise of fintech companies.
The association reported that 93.8% of respondents to its 2017 Federal Reserve Meeting Survey expect information technology to be a major driver for credit union spending increases in the coming years.
"Our 2017 NAFCU Report on Credit Unions reveals that even in the face of regulatory challenges and financial pressures, credit unions continue to provide exceptional service to nearly 110 million members across the country and stimulate the national economy with more than $16 billion annually in benefits," said NAFCU President/CEO B. Dan Berger.
NAFCU said in the annual report that a review of merger data since 2001 shows that small credit unions are far more likely to merge than larger institutions. While mergers at credit unions with more than $100 million in assets are rare, between 4% and 5% of the credit unions with less than $50 million in assets have merged.
NAFCU also reported that as of June, the year-over-year growth in net worth among credit unions was 7.1%, slightly below asset growth, which stood at 7.7%.
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