Committed to Community Development Presentation to National Federation of Community Development...

Committed to Community

DevelopmentPresentation to National Federation of

Community Development Credit UnionsBaltimore, Maryland

June 7, 2013

Debbie Matz, Board ChairmanNational Credit Union Administration

Committed to Community DevelopmentCommitted to Community Development

CDCUs Are Vitally Important!

• People of Modest Means• Low-Income Communities• The Credit Union Community

Community Development Credit Unions serve:

2

Committed to Community Development

Small Credit Unions Are DisappearingNumber of Credit Unions by Asset Group

< $50 $50-250 250 - $1B >$1 B0

1000

2000

3000

4000

5000

6000

7000

8000

9000

7891

1353

372 70

4605

1462

556195

2002 2012

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2009 2010 2011 20120

50

100

150

200

250

300

350

212162

224 238

24

29

1316

Voluntary Mergers

Assisted, Emergency, and Supervisory Mergers

Mer

gers

Mergers Are Rising Again

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More than 91% of Mergers are Voluntary


Unprofitable Credit UnionsMore than 34% of Small CUs were Unprofitable in 2012

< $50 $50 - $100 $100 - $250 $250 - $500 $500 - $1B >$1B0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%34.25%

13.11%

8.48%

2.59%0.48% 0.51%

% of CUs Unprofitable by Asset Group

% Unprofitable

5


Recovered: 21%

Stuck in PCA Territory:

12%

Opted Out: 38% (merger or voluntary liquida-

tion)

Failed: 29% (P&A or in-

voluntary liq-uidation)

Prompt Corrective Action: Few Small CUs Recover42 Small CUs Fell into PCA Territory in 2007… 67%

Were Gone by 2012

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Small Credit Unions Struggling;Low-Income Credit Unions Surging

Key Credit Union Ratios(as of Year-End 2012)

Year-End 2009 Year-End 2010 3RD Qtr. 2012

FICUs under $50 Million

Low-IncomeCredit Unions

All Credit Unions

Return on Assets + 0.23 % + 0.76 % + 0.86 %

Net Worth 12.44 % 10.62 % 10.44 %

Loan Growth - 6.54 % + 6.08 % + 4.59 %

Loan Delinquencies 1.61 % 1.31 % 1.16 %

Net Charge-offs 0.58 % 0.66 % 0.73 %

Membership Growth - 6.86 % + 2.49 % + 2.18 %

7


< $50M $50M - $250M $250M - $1B $1B+

7 17 27 5040 28 20 1222 25 50 4

Share of Assets, Exam Hours and Lossesby Asset Group

Assets Hours Losses Assets Hours Losses Assets Hours Losses Assets Hours Losses

Credit Union Exam Hours vs. Losses

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New Office of National Examinations and SupervisionReallocating NCUA Resources Shifts in allocations based on assets and risks

Less than $10M

$10M to $50M

$50M to $100M

$100M to

$250M

$250M to

$500M

$500M to $1B

$1B to $2.5B

$2.5B to $5B

Greater than $5B

-5%

0%

5%

10%

15%

20%

25%

30%Share of Exam Hours by Asset Group

2011 Exam Hours2012 Exam Hours

9


Streamlining Small CU Exams

• Eligibility: FCUs with assets up to $50 Million• Draft scope and procedures target main risks:

Fraud, Record-keeping, Lending• Core transaction testing for all small CUs– More in-depth, “triggered” levels of review, based

on core results

2013: Transition Period

2014: Training and Implementation

2015: Full Adoption

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NCUA’s Commitment to CDCUs

• Shorter Examinations• Examiner Guidance• Regulatory Relief• Low-Income Designation Initiative• Office of Small Credit Union Initiatives

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Committed to Community Development 12


Building Your Future

• Internal Controls• Strategic Planning• Due Diligence

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Contacting the Office of the Chairman

Chairman: Debbie [email protected]

Chief of Staff: Steve [email protected]

Senior Advisor: Buddy [email protected]

Asst./Scheduler: Angela [email protected]

Phone: 703-518-6301

Feel free to contact our office with questions or comments.

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mailto:[email protected]




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