ALEXANDRIA, Va.-In its just-released 2003 Yearend Statistics for Federally Insured Credit Unions, NCUA determined that credit union finances have remained strong despite the low interest rate environment. "Financial performance of the industry remains strong despite the challenges presented by the low interest rate environment. Credit unions need to remain vigilant in monitoring the impact of changing interest rates and make adjustments to maintain an acceptable level of risk," the report concluded. Some of the highlights from the data: *Assets climbed 9.52% or $53 billion *Net worth increased $5.7 billion, or 9.57% *The aggregate net worth ratio was up slightly to 10.72% *Loans were up 9.75% *Shares rose 9.11% *The loan to share ratio increased from 70.78% to 71.19% *Cash and short-term investments were down 5.79%, while investments over one year were up 28.06%. Nearly all investment categories increased in 2003, which resulted in a 14.68% ($20.6 billion) increase in total investments. These categories, along with short-term (less than one year) investments decreased 5.79% ($6.0 billion). Credit unions total net income rose 2.33%, though the average return on assets dropped from 1.07% to 0.99%. Though the net interest margin declined to near historic lows-3.41%-credit unions made up for some of it with substantial increases in fee and other income. Bankruptcies Though delinquent loans increased 5.78% or $157.3 million, the ratio of delinquencies to total loans was down from 0.79% to 0.77%. Funds charged off rose 17.64%, while recoveries on charged off loans was up just 13.38%, resulting in net charge offs up 18.35% ($313.4 million), NCUA found. Because this outpaced loan growth, the charge off to loan ratio was up from 0.51% to 0.56% in 2003. The agency explained that federal insured credit unions reported an increase in members filing for bankruptcy from 0.29% to 0.31%. Loans outstanding that are subject to bankruptcies total $1.9 billion. In all bankruptcy filings accounted for $870 million, or 37.14% of loan charge offs. The credit union trade associations and other lenders have been working to get bankruptcy reform legislation through the Congress. The Bankruptcy Abuse prevention and Consumer Protection Act (H.R. 975) passed the House by a vote of 315 to 113 back in March 2003. It has languished in the Senate ever since, stymied by the so-called Schumer amendment-among other issues-which would prevent those convicted of violence against abortion clinics from filing for bankruptcy to avoid the associated fines. In listing out the lobbying activities CUNA is doing during the August congressional recess, Vice President of Legislative Affairs and Senior Legislative Counsel Gary Kohn said, "Not to be forgotten: bankruptcy reform. This is still an issue that is out there. We see there's significant interest in trying to do something with that. Again, the effort right now is in trying to figure out how to get that done given the remaining time that we have." -

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