Wednesday, January 19, 2011

Credit Unions with the Lowest Borrower to Member Ratios

As of September 2010, NCUA reported that the borrowers to members ratio for federally-insured credit unions was 49.73 percent. The borrowers to members ratio is calculated by dividing the total number of loans outstanding by the total number of members.

The following table (click to enlarge) ranks the 50 credit unions (minimum of $100 million in assets) with the lowest borrowers to members ratios, as of September 30, 2010. The credit union with the lowest borrowers to members ratio is Latino Community in Durham, N.C. with a ratio at 9.03 percent.

Readers should be cautious not to make a generalization that credit unions with low borrower to members ratios are not meeting the credit needs of their members.

2 comments:

  1. You end your blog with, "Readers should be cautious not to make a generalization that credit unions with low borrower to members ratios are not meeting the credit needs of their members." But you don't suggest a better way to interpret the data. Why is that?

    ReplyDelete
  2. Dear Anonymous:

    I can think of several reasons for low borrower to member ratios. First, consumers are deleveraging, so a CU is not seeing much demand for loans. Second, the demographics of the CU could result in low borrower to member ratio. Bulk of the membership could be older and passed the peak borrowing period. Third, a credit union could be primarily a business lender. According to NFIB, only about 30 percent of small businesses are actively borrowing. Moreover, NFIB has stated that given the lack of final sales, there is not strong demand for credit among small business owners.

    ReplyDelete

 

The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.