However, CUNA Mutual Group's report also stated that a controversial part of Dodd-Frank is driving people away from banks and to credit unions.

The Durbin Amendment capped the fees large banks can charge merchants to process debit card transactions. To make up for that lost revenue, banks are increasing monthly fees for having a debit card or checking account, CUNA Mutual Group said.

"The higher charges are driving many bank customers to their local low-or-no-fee, not-for-profit credit union," the group said.

Ironically, credit unions have been outspoken in their opposition to the Durbin Amendment, which pits them against retailers, who favor it. House Financial Services Chairman Jeb Hensarling included a repeal in his Financial CHOICE Act last year, but dropped it, as supporters of the legislation said a fight over the repeal could have endangerd the bill on the House floor.

While credit union membership continued to grow, the number of credit unions continued to drop, CUNA Mutual Group said. As of August, the group estimated that there were 5,686 credit unions in operation, down 208 from August 2017. So far, 114 credit unions have closed during the first eight months of the year, compared with 128 during the same period last year.

Small credit unions continued to struggle with earnings; during the first half of 2018, credit unions with assets less than $20 million reported an average return-on-asset ratio of only 25 basis points, up from last year's ratio of 14 basis points.

CUNA Mutual Group also reported that:

• Credit union balances rose 1% in August, above the 0.9% level in August 2017. During the past 12 months, credit union balances increased 9.7%, a slight decrease compared with the double-digit pace during the past four years.
• Credit unions have 8.8% of the first mortgage origination market, up from 8.2% last year and 2.6% a decade ago.
• Credit union consumer installment loan balances rose 1.4% in August, a large increase from 0.2% in August 2017.
• New auto loan balances increased 1.2% in August, above the 0.6% level in August 2017. New auto loan balances are increasing at an 11.6% seasonally adjusted annualized clip, a slower pace that during the past few years.
• Fixed-rate mortgage loan balances grew 0.5% in August, slower than the 0.6% pace in August 2017 Credit unions now hold $422 billion in first mortgages on their books, with 72% of them being fixed-rate.
• Home equity lending grew 0.9%, much the same as last year, when it increased 0.8% in August.
• The contract rate on a 30-year fixed-rate conventional mortgage rose to 4.55% in August, up from 3.88% in August 2017. CUNA Mutual predicted that the 30-year mortgage interest rate will increase 25 basis points during each quarter of the next year. "We expect the interest rate rise to have a negative impact on new and existing housing demand during the next year," CUNA Mutual said.
• Credit union surplus funds rose $9.3 billion, or 2% in August. Capital grew $1.2 billion and credit union surplus funds as a percent of assets fell to 24.6% in August. That is the tightest credit union liquidity position since 2000.