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Low-income CDCUs growing despite economy
NEW YORK (7/23/10)--A new study released by the National Federation of Community Development Credit Unions examines the impact of the financial crisis on credit unions that specialize in serving low-income populations. The nonprofit community development credit unions (CDCUs) suffered significant stress but also demonstrated resilience and growth in 2009, according to the study. “Despite the enormous pain inflicted by the crisis, CDCUs remain a viable and vital resource for the recovery of low-income communities,” said Clifford N. Rosenthal, federation president/CEO and co-author of the study. The study, entitled “Low-Income Communities and the Great Recession: Financial Trends in CDCUs, 2009,” presents data on trends in lending, savings, operations and balance sheets of 208 CDCUs nationwide. In 2009, these institutions with aggregate assets exceeding $5 billion served more than one million members. The study compares CDCU performance to that of all federally insured credit unions, and also includes analyses by region and asset size. Among the findings:
* CDCU membership grew by 41,000 during 2009; * Deposits in CDCUs grew by 16.2%, substantially exceeding the robust growth of all federally insured credit unions; * The CDCU loan portfolio grew by 4.83% to $3.69 million; * Loan originations totaled $1.51 billion in 2009, a decline of 3% over the pace in 2008; * Return on Average Assets was slightly negative (-9 basis points) for the typical (median) CDCU, reflecting charges to replenish the National Credit Union Share Insurance Fund; * Most CDCUs remained “well-capitalized” by regulatory standards, with a median net-worth ratio of 9.53%; * Net loan charge-offs totaled 1.43%; and * CDCUs provided services to help low- and moderate-income consumers preserve and build assets, ranging from Individual Development Accounts, to no-cost checking, to alternatives to payday lending.
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