Few Options to Offset Costs for CUs Topping $10 Billion Asset Threshold

S&P Global Market Intelligence recently wrote that large credit unions have few options available for offsetting the regulatory burden of breaching the $10 billion asset threshold.

This article should be of interest for credit unions that are within several years of the $10 billion asset threshold. As of June 2019, there were three credit unions with at least $9 billion in assets and another 5 credit unions with between $8 billion and $9 billion in assets.

The article notes that credit unions, which topped the $10 billion threshold, have seen a drop in fee revenue due to the Durbin Amendment and an increase in compliance cost, as the credit unions become subject to oversight by the Consumer Financial Protection Bureau and increased regulation by the National Credit Union Administration.

Credit unions that have topped the $10 billion asset threshold have seen an up to 50 percent decline in debit card interchange revenues due to the Durbin Amendment.

The article also states that credit unions that top the $10 billion asset threshold may lack the ability to scale up rapidly to offset these new costs, as they tend to grow organically.

Read the article.