Minority Credit Unions Down 4 Percent, 10 Percent Were Problem CUs

The National Credit Union Administration (NCUA) Quarterly Report looks at minority credit union data.

According to the NCUA Quarterly Report, NCUA either regulated or supervised 580 federally insured credit unions that self-identified as a minority credit union or minority depository institution, as of June 30, 2017 -- down nearly 4 percent from 603 a year earlier.

While minority credit unions were 10 percent of all federally insured credit unions, they accounted for 3 percent of the industry's assets.

Eighty-nine percent of minority credit unions have assets under $100 million. The vast majority of minority credit unions — 81 percent — have assets of less than $50 million. An additional 8 percent have assets between $50 and $100 million. There were 66 minority credit unions, or 11 percent, with assets of more than $100 million at the end of the reporting period.

Approximately 77 percent of minority credit unions, or 448, have the low-income designation.

Ninety-five percent of minority credit unions are well-capitalized versus 2 percent that were undercapitalized, at the end of the second quarter of 2017.

Sixty-five percent of minority credit unions were profitable with 110 minority credit unions reporting a return on average assets in excess of 1 percent.

A majority of minority credit unions reported a delinquency rate in excess of 1 percent. The median delinquency rate was 1,3 percent for minority credit unions versus a median delinquency rate of 0.68 percent for all federally-insured credit unions.

Ten percent of minority credit unions had composite CAMEL ratings of 4 and 5. A credit unions with a composite CAMEL ratings of 4 and 5 is a problem credit union. In fact, minority credit unions make up a disproportionate share of federally insured credit unions with a composite CAMEL ratings of 4 and 5, as only 3.2 percent of all federally insured credit unions have a composite CAMEL ratings of 4 and 5.

Read the report.