WASHINGTON — NAFCU's most recent Flash Report survey confirmed that 74% of credit union respondents felt the recent data collection effort by the NCUA, known as the Member Service Assesment Pilot Program, was an inappropriate expense and should not be expanded as currently structured.

In 1934, credit unions were organized to serve those of modest means. Recently, the modest means definition has come under scrutiny by the Government Accountability Office, Congress, and the banking industry.

Back in 1999, former Chairman of the Senate Banking Committee Phil Gramm noted that credit unions were consistent in serving their communities. February's NAFCU Flash asked participants if they felt credit unions continued to serve their communities; 91% said yes.

Even though the Flash survey found that 91% of respondents believed that CUs continued to follow the charter, former Chairman of the Senate Ways and Means Committee Bill Thomas (R-Calif.) requested the NCUA provide tangible evidence credit unions were continuing to serve the underserved.

In response to Thomas' request, NCUA undertook a data collection effort in 2006. NCUA's MSAP surveyed the membership attributes of FCUs.

While NAFCU's Flash Report found Gramm's comments valid, the MSAP staff recommendations included continued data collection. NCUA Board Member Gigi Hyland is wrapping up the results of the Town Hall meetings held throughout 2007 seeking to gather CU input in line with the MSAP suggestions.

The MSAP survey taken by NCUA cost approximately $1.1 million dollars and 74% of Flash respondents questioned the NCUA survey expense.

NAFCU's Flash Report also examined prominent economic indicators with NAFCU economists echoing the Federal Reserve predictions. As has been widely reported, the housing market has continued to decline. NAFCU economists predicted that across-the-board improvements in the housing market are not likely until sometime in 2008. Among the issues that will affect credit unions in 2008 are mortgage loan origination fees, which are going to decline, the NAFCU report said.

NAFCU reported that vehicle sales took a sharp drop in January, continuing the downward trend. According to the report, sales for all the “Big Six” manufactures were down. Dr. Tun Wai, chief economist at NAFCU said, “Consumers' demand for big-ticket items continues to be dampened by low consumer confidence, high energy prices, a weakening labor market, declining home equity, and lower credit quality.”

Decreased vehicle sales will also impact credit unions with a decline in new vehicle lending. Economists at NAFCU expect new vehicle lending to be sluggish throughout 2008. Credit unions responding to the report also expected new-and used-vehicle loans to decline.

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