Monday, June 11, 2018

Some CU Groups Burning through Cash

Several credit union trade organizations in recent years are burning through cash like there is no tomorrow.

The lack of fiscal discipline at some credit union organizations has caused some readers of this blog to express concerns.

For example, the Credit Union Executive Society (CUES) posted four consecutive years of losses, according to its most recent Form 990s. Losses were $660,027 in 2016, $699,019 in 2015, $493,721 in 2014, and $555,721 in 2013.

The World Council of Credit Unions (WOCCU) reported losses for 2015 and 2016 of $729,955 and $1,045,977, respectively. WOCCU"s Form 990s showed a more than 50 percent cut in grants, gifts and contributions from almost $11.8 million in 2014 to less than $5.5 million in 2016. The organization's net assets fell from over $2 million in 2015 to $411 thousand at the end of calendar year 2016.

The Credit Union National Association (CUNA) reported in its minutes from the December Board meeting that the association would post a loss of $4.9 million for 2018. The loss was primarily due to the vacating its current office space at the cost of $4 million for new offices in Washington, D.C. However, CUNA expects almost $1 million in annual savings over the next 10 years on its new lease.

Unlike CUES and WOCCU, I believe CUNA's loss is a one-off event; but credit unions that belong to CUNA should carefully monitor CUNA's finances.

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