Credit unions as a whole are healthy, with strong balance sheets.

• Credit unions are well capitalized. Their overall capital-to-asset ratio stands at a very solid 11.1% (compared to 10% for banks). In dollars, that's a capital cushion of $90 billion.
• Credit union mortgage delinquencies at the end of the first quarter stood at only 0.7%. First mortgage charge-offs were a miniscule 0.06%.
• More broadly, credit union loan delinquencies have edged up, but still are at a very low 1.0%.

 

Credit unions have steered clear of the subprime mess. We're still lending responsibly.

• In the first four months of 2008, mortgages at credit unions grew faster than all other loans. This at a time when mortgage losses have forced other lenders to scale back or close their doors entirely.
• Why? For one thing, credit unions operate more conservatively and tend to hold more of their mortgage loans (about 70% in fact) in portfolio rather than sell them to Fannie and Freddie on the secondary market.
• Secondly, credit unions are member-owned and not-for-profit cooperatives. We exist to serve our members, not profit from them. Unlike the banks and brokers, we're not out to force loans on our members just to make a quick buck.
• Today 56% of credit unions offer first mortgages, and 90% of the nation's 90 million credit union members belong to one of the credit unions that offer first mortgage loans.
• To the extent credit unions have been impacted by the subprime debacle, it's primarily as "collateral damage" members having trouble making payments on other loans because of subprime mortgage they've gotten elsewhere, or because some members are losing their jobs in today's down economy.
• But credit unions went into this with very strong balance sheets, and will still be in very strong shape when it's over.

 

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