MADISON, Wis. - With less than three months left in the year, credit unions may still be able to add a total of 1.8 million members for 2004 despite a historically slower membership trend. Credit unions added 138,000 members in July, bringing the year-to-date gain to nearly 1.3 million and total membership at 86.1 million, according to CUNA Mutual Group's latest Trend Report. CUNA Mutual's report is based on data from CUNA E&S's "Monthly Credit Union Estimates," the Federal Reserve Board and CUNA Mutual Business Insight Group - Economics. "It wouldn't surprise me if the 1.8 million happened," said Mike Schenk, vice president, economics and statistics for CUNA. "In a fairly short period of time, we would need to see a fairly big bump up," he added, saying the forecast figure may actually be closer to 1.7 million. That increase would be in line with historical norms, even as the question remains whether the past year's membership slowdown is "an aberration or a trend." "Are credit unions spending more time on finding out who they're members are, are they being aggressive on weeding out dormant accounts? It's not really clear what the overriding factors are" (for the slowdown), Schenk said. Membership appears to be up even as industry consolidation continues. An estimated 286 credit unions with assets less than $20 million no longer exist as of the first half of 2004. Over the first seven months of 2004, the credit union count is down by 198. This is roughly six credit unions higher than the average July year-to-date decline over the previous three years, according to CUNA Mutual. At mid-year, the 1,175 credit unions with assets above $100 million (12%) held 67.2% of all members. The 90 credit unions with assets in excess of $1 billion (less than 1%) had a member market share of 22.0%. Within the banking industry, consolidation tends to lead to dissatisfaction, especially with big, out-of-state institutions, Schenk said. Consolidation has quite the opposite effect with credit unions. "When large, local credit unions assume members of smaller credit unions, there's an access to more services not seen before," Schenk said. "Historically, the consolidation trend is what we've been seeing over the last 10 years." According to a Filene Research Institute study, Asset Growth at CUs: Growth in Membership vs. Assets per Member, membership growth does appear to be the main reason that larger size is associated with higher growth in total assets. Across asset sizes, the researchers did not see a strong association between size and the subsequent growth rate of assets per member. When divided into fast growers and slow growers, a credit union's size did not have a strong relationship to growth rates, the research found. The smallest asset category grew about as fast as the largest, and across all asset sizes growth rates in real assets fell into the 9%-11% range. Among fast growers in the $5 million to $500 million asset group, size was not shown to have a strong connection to either the growth rate of members or assets per member. At credit unions with more than $500 million in assets, membership growth was more than three times as important as growth in real assets per member. Among slow growers, or those in the bottom 20% of real asset growth, the study found that growth rates of membership increase steadily with asset size. [email protected]