MADISON, Wis. – It looks like expanded charters are starting to pay off for credit unions looking to increase their membership. The count has finally topped the 87 million mark after hovering underneath 86 million for most of last year. According to CUNA Mutual Group's March Credit Union Trends Report, 511,000 members joined in March with nearly 1.4 million members signing on since March 2004. Several factors are likely contributing to this rebound, said Dave Colby, chief economist for CUNA Mutual. Indirect lending appears to be creating new members with 3.7 million loans at the end of 2004 "although the jury is still out on the value of these new relationships," Colby said. If 2004 trends continue as expected, the vast majority of portfolio growth will be attributable to indirect originations, Colby said. "Credit unions choosing not to use the indirect route will need to aggressively elevate member awareness of the values of credit union financing," Colby said. Another factor buffering membership rolls appears to be coming from the NCUA's granting of field-of-membership expansions, he added. "To date, these expansions have not correlated well with membership growth, but it takes time to convert new opportunities into actual members," Colby said. The "clean-up of membership rolls through improved software and giving low balance-inactive members the option to close accounts, may have run its course," Colby suggested. The industry's annual growth rate has now improved to 1.8% compared to the 1.4% gain generated in 2004, according to the report. Still, CUNA Mutual's forecast for the rest of this year still anticipates low membership numbers. "We choose to remain conservative in our projections until a longer-term trend is established and validated by actual NCUA reported result," Colby said. Meanwhile, credit union consolidation continued its trend through March with 109 of them gone since the beginning of 2005, the report said. There are now 9,237 credit unions standing. "The combined pressures of competition, compliance and ever rising member expectations will drive above trend consolidation rates over the next couple of years," Colby said. Indeed, on average, 36 credit unions are being consolidated each month, the report showed and annualized first quarter results indicate a net loss in excess of 400 credit unions this year. "While we believe the pace of consolidation will slow from its current level, our forecast of 371 fewer credit unions by year-end is higher than 2004 results," Colby said. "Our outlook for 2006 calls for the loss of another 361 credit unions." [email protected]