Monday, July 14, 2014

Credit Union Sweep Programs

At the end of the first quarter of 2013, 153 credit unions had sweep account programs, where funds were transferred from share drafts (transactional accounts) to regular shares or money market accounts (nontransactional).

By sweeping these checking deposits into a nontransaction account, a credit union is reducing its required reserves.

In general, it is large credit unions that have sweep account programs. The median asset size for a credit union with a sweep account program was $901 million, while the mean asset size was $2.5 billion.

Hudson Valley Federal Credit Union (Poughkeepsie, NY) had almost $1.7 billion in share drafts being swept into regular shares or money market accounts, as of March 31, 2014. The following table ranks the top 25 credit unions sweep account programs on the dollar amount of accounts swept.

As of March 31, 2014, approximately 14 percent of all deposits at these 153 credit unions were in a sweep account program. However, some credit unions reported having a large percentage of their share drafts being swept into regular shares or money market accounts. Cascade Community CU in Roseburg (OR) reported that almost 72.5 percent of its checking accounts were swept into nontransactional accounts. The following table provides a list of the credit unions with the highest incidence of swept shares as a percent of total deposits.


  1. And your point is??

  2. How is the receiving account non-transactional? Doesn't Reg D limit these to only 6 per month?

  3. Mr. Leggett
    I don't understand what the point of this article is? Usually I follow your criticisms of credit unions - but not this time. Don't banks as well as credit unions want to reduce required reserves? I am missing what this article has to do with credit unions? And especially why you pointed out that "large" credit unions do this? Do not "large" (and small) banks do this too?

  4. I stumbled onto this line item on the call report. I was not aware of how some of the larger CUs were using sweep programs. But I shouldn't have. It just shows that many large CUs are offering similar products that banks offer and behave just like their bank counterparts.

    1. So was that "sort of" an apology? Are you admitting there is really nothing wrong with sweep accounts for either credit unions or banks (large or small)? Right? Look forward to a clearer retraction of this misguided "attack" on credit unions (and banks for that matter.) Thanks.

  5. And they do this on a not-for-profit basis; returning equity to their member/owners in the form of products and services. Who is a bank working for? Difference #1 Mr. Leggett. No different than any other cooperative. Where is the blogger that trashes the Food Co-Ops for the big grocery chains? Co-Ops have been around a long time - and they are in all sectors. Member / owners are voting with their feet and wallet. Glad we have choices!

  6. This was not an attack on credit unions.

  7. Fwiw. You're right
    Members are voting with their feet and wallet.
    That's why banks have had and still have 95% market share of US deposits.
    Oh, but wait, that CANT be!!
    Cuna CANT be lying to us!
    Even with all that disgusting shareholder focus, banks have 95% of the business.

    1. Sounds like credit unions should be open to all then. Why should CUs require a FOM (granted, some are pretty loose FOM already)? If banks own 95% of the market, why do they care? Why does this blog exist when only 5% can be gained? If a CU operates as a cooperative - an approved model used in food, Ag, health, etc., then why not allow anyone that wants to join, join? What are the for-profit banks worried about? CU and Banks have two different models - it provides choices/alternatives.

  8. here is the only "model" difference credit unions have and certainly the only "model" difference they care about...FEDERAL TAX EXEMPT".
    5 members show up at annual meetings.
    members dont vote or run for the board.
    members refer to the cu as "my bank".
    members dont act in ANY way like owners because they are not owners.
    most, but not all boards are unpaid volunteers and most spend thousands of member dollars per year going to las vegas and on cruises for "learning".
    members dont hold boards accountable (and if they did about 4000 credit unions would be merged up by credit unions like mine by now.
    the only two choices we need for financial services are federal or state.
    we are all banks.

    1. You have a choice too. Make it. Love my CU.

    2. I love my husband and our dog.
      Poor you that you love a building with the same people and products as 13000 other buildings. Enjoy!

    3. My only point is we should make every attempt to enjoy what we do. Family (and dogs) comes first, no doubt. But if you don't believe in what you are doing matters, whether at $100 mil or $1 + bil., then go find what does get you excited. Don't find all the faults in me, just because I think CUs (and banks) can serve a worthwhile purpose. If not, I can live with your judgment of little ole anonymous me.

    4. Good for you thst you have balance and thst you give banks some credit too as there are banks like jpmorgan and then theres the community banks.



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