The number of the lowest-rated credit unions based on their exam scores rose in the third quarter, their federal regulator said Thursday, reflecting strains on balance sheets and their consumer members, according to the agency.
That total includes nine troubled complex credit unions with more than $500 million in assets, according to the agency.
The National Credit Union Administration (NCUA) Board, meeting in open session, learned in a report on the National Credit Union Share Insurance Fund (NCUSIF, the federal savings insurance fund for credit unions administered by the agency) that the agency continues to see “signs of financial strain on credit union balance sheets and consumer financial stress.”
According to NCUA, the number credit unions with the lowest exam scores (codes 4 and 5 under the CAMELS rating system) increased in second quarter from 136 to 138 at the end of the third quarter. However, assets for these credit unions decreased slightly from $19.6 billion to $19.1 billion.
“We continue to see signs of financial strain on credit union balance sheets and consumer financial stress,” said NCUA Board Chairman Todd Harper. “Of greatest concern for me has been the large number of troubled CAMELS code 4 and 5 credit unions, especially the nine troubled complex credit unions with more than $500 million in assets,”
Harper asserted that those third quarter results “are another reason why our supervision of these and all federally insured credit unions must remain risk focused.” He said the results also highlight the need for the NCUA’s examiners to be ready to act expeditiously when identifying problems.”
Also at the agency board’s meeting:
- It was noted that, as of the end of the third quarter of 2024, two federally insured credit union failures cost the NCUSIF approximately $2 million in losses.
- The insurance fund reported a net income of $72.2 million for the third quarter of 2024, $22.6 billion in assets, and $145.8 million in total income for the third quarter of 2024.
- The board unanimously approved the 2025–2026 Central Liquidity Facility’s (CLF) budget of $2.3 million for 2025 and $2.4 million for 2026.
NCUA Board Approves Central Liquidity Facility Budget for 2025–2026
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