ARLINGTON, Va. – NCUA 5300 call report data released by the agency and reported by the trade associations as collective data show a credit union industry characterized by increased deposits, growing membership, decreased loan-to-share ratios and delinquency rates. But separate the data by type of charter – state vs. federal – and the disparity between the performances of the two charter types becomes "profoundly evident," says NASCUS. Since 1994, Sheshunoff Information Services has been tracking comparative 5300 call report data for NASCUS in key ratios areas such as loans-to-share, loans-to-assets, delinquent loans, capital-to-assets, net capital to assets, operating expenses-to-average assets, and cost of funds-to-average assets. This year, NASCUS went a step further. By working with Massachusetts Share Insurance Corp. which provides excess insurance as required by state law to credit unions in Massachusetts, NASCUS was able to obtain additional data and do a deeper comparative portfolio analysis between federal and state charters in loan product areas, as well as growth trends. MSIC has been tracking the performance of all state-chartered credit unions in Massachusetts for several years, based on 5300 call report data. This year, the company took its analysis program a step further and did the same report for all state-chartered credit unions. The results, says NASCUS President/CEO Doug Duerr turned up several interesting findings. When looking at historical federal/state-chartered CU data what first becomes apparent, said Duerr is that from 1995 to 1996 the key ratio performances between the two charters were very similar. For example, as of June 30, 1995, loan growth was 14.1% for SCCUs and 13.9% for CUs; capital-to-asset ratio was 10.9% for SCUs, 10.5% for FCUs; and loan-to-share ratio was 70% for SCUs and 68.7%, FCUs. In addition, share growth was 6.3% and 6.0% for SCCU and FCUs, respectively. Once FCUs began to get entangled in field-of-membership expansion litigation with the banking groups in 1996 and into 1997, a shift in numbers between SCUs and FCUs begins to become evident. In June 1997, for example loan growth for SCUs was 16.8% and for FCUs it was 9.65%; share growth was 10.96% for SCUs and 5.85% for FCUs; loan to share ratio was 74.5% for SCUs and 72.6% for FCUs. "We can speculate all we want about the causes for the disparity, but it's very apparent that the federal credit union system was significantly injured by the bankers' litigation and field-of-membership expansion moratoriam and continues to be injured by the construction of the new field-of-membership rules that apply to federal credit unions," said Duerr. "State-chartered credit unions had a more open door for new groups of members, allowing for the combination of small employee groups, occupational and community groups. This helped to serve the pent up demand among groups for credit union services. The strong surge in members among state-chartered credit unions led to strong share and loan growth," said Duerr. "Federal credit union performance, in comparison went the other way. "If NASCUS had seen happening to state-chartered credit unions over the past three years what's been happening with federal credit unions, we'd have been sounding the fire alarms and bells and developing plans and solutions a long time ago," said Duerr. -

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