MADISON, Wis. — With an estimated 176,000 new members added in June, credit unions are on pace to add 1.1 million members by the end of the year.
CUNA Mutual Group's June Credit Union Trends Report is sticking by its one million member forecasts for 2006 and 2007. June's estimated addition of 176,000 members has already exceeded its "conservative" forecast. At 88.3 million, total CU membership is up 1.3 million year-to-date and 1.4 million over the past year. Mirroring 2005′s mid-year data, strong membership gains came in June.
David Colby, chief economist for CUNA Mutual, continued to emphasize that long-term relationships are a stronger measurement of growth.
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"As we have commented on in the past, depth of relationship is a better indicator of future success than the basic counts," Colby said.
While CUNA Mutual stands behind its forecast, Colby said it will "gladly" revise its membership outlook if current trends hold. Current data may also be subject to some revision based on the "mid-year true-up" with NCUA 5300 Call Report data, which is expected in October.
Meanwhile, the industry lost 34 CUs in June. Through the first half of 2006, CUNA Economics & Statistics estimates show a net decline of 167 CUs, well above the 148 CUs lost over the same period in 2005. This translates into a total CU count of 8,848 at the end of June. Colby said market declines are steeper in the second half of the year and 2006 will be no exception.
"The combination of narrowing spreads, rising expense levels and escalating compliance burdens will push more CUs toward mutually beneficial mergers," Colby pointed out. "The forecast loss of one CU per day will likely underestimate future results if any economic shocks or significant regulatory changes occur."
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