The National Credit Union Administration Thursday released its comprehensive industry data for the third quarter of 2024, and for the most part it continues a gloomy trend.

Perhaps most notably, total loans outstanding increased $40.6 billion, or just 2.6% during the past four quarters, to $1.63 trillion.

“We experienced anemic loan performance along with rising default rates. Credit card and auto loan delinquencies remain especially elevated,” said NCUA Chairman Todd Harper in the release. “The NCUA, therefore, continues to urge credit unions to carefully manage their credit risks in this time of growing financial stress among members.”

The delinquency rate at federally insured credit unions was 91 basis points in the third quarter of 2024, up 19 basis points from a year earlier. On top of that, the net charge-off ratio was 78 basis points, up 22 basis points compared with the third quarter of 2023.

As a result, the provision for loan and lease losses or credit loss expense increased $3.3 billion, or 33.5% across the industry, to $13.2 billion at an annual rate in the first three quarters of 2024.

Mark Treichel, a former executive director of the NCUA who now runs Credit Union Exam Solutions, told Tyfone the steep rise in credit union delinquency rates, coupled with a sharp increase in loan loss provisions, signals deteriorating credit quality that will likely trigger more intensive examinations in 2025.

“Given these emerging risks, I think it is fair to assume that NCUA regional staff is concerned about losing 10 examiners to mission support positions in the 2025 budget when their expertise is needed in the field,” he said.

Perhaps more troubling, much of the industry’s loan and membership growth continues to come at the top end of the asset spectrum.

While credit unions with assets of at least $1 billion but less than $10 billion saw 6% growth in both loans and membership during the past year, the smallest credit unions – those with less than $10 million of assets – experienced a 7.2% decrease in loans, and membership declined 6.4%.

So while Navy Federal, the world’s largest credit union, now boasts more than 14 million members after a 7% increase during the year, the $10 millon-asset AT&T Employees FCU in Pittsburgh saw membership fall from 931 to 921.

In total, U.S. credit unions had 142 million members after they added 3.2 million members during the past four quarters.

As of Sept. 30, there were 4,499 federally insured credit unions, down from 4,645 in the third quarter of 2023.

“The credit union system remains healthy overall but with several mixed signals.”

 – Todd Harper
Chairman
NCUA