Banks Facing More Competition From Credit Unions (BAC, JPM, WFC)

Banks were able to shine for years and years over credit unions.  This new age of “too big to fail” after bailouts and then banks gouging customers for charges may be creating the new perfect storm for credit unions.  This may help regional and community banks as well, but the move appears to be setting up well for credit unions based upon new third quarter data that was released by the National Credit Union Administration.

The NCUA has turned in data that might be concerning to companies like Bank of America Corporation (NYSE: BAC), and the now-larger J.P. Morgan Chase & Co. (NYSE: JPM) and also companies like Wells Fargo & Co. (NYSE: WFC).  The new data shows growth in members, assets, and in net worth.  It also shows that deposits and lending are on the rise.

The data came from the nation’s 7,179 federally insured credit unions and the net worth ratio ticked up to 10.15% while the loan-to-share ratio fell slightly.  The reports show that net income growth slowed, but the income from the first none months is already above net income reported in all of 2010.

There was a slight decline in the number of federally insured credit unions, but these credit unions showed net gains in membership to the tune of over 450,000 members in the third quarter alone.  Credit unions now have 91.4 million individuals and that is almost 1 million higher than in 2010. 

Maybe those $5.00 per month of debit card fee ambitions took a toll on the banks.

Credit union total assets grew by $8.7 billion during the quarter to $951.1 billion as of September 30.

New auto loans and other real estate loans continued to decline, while used vehicle loans, unsecured loans—including credit cards—and first mortgage real estate loans again all rose during the quarter.

FULL REPORT