Agency crows that MDI credit unions outpace all others in growth of memberships, assets, loans

Growth last year in membership, assets, and loans for minority deposit institution (MDI) credit unions is being touted by their federal regulator in a report issued to Congress Wednesday.

According to the National Credit Union Administration (NCUA), the 503 federally insured MDI credit unions at year-end 2022 (about 10% of all federally insured credit unions; the total is down slightly from the year before of 509) held $64.7 billion in assets (up 9.8% from 2021) and counted 5 million members (up 14.1% from the previous year).

Loans at the credit unions totaled $42.2 billion (up 23.2% from the year before). The NCUA said the loans were primarily concentrated in one-to-four-family unit first-mortgage loans ($15.7 billion) and vehicle loans ($14.7 billion).

The agency noted that the growth rates in memberships, assets and loans were higher than those for all credit unions generally in 2022.

An MDI credit union, the agency said in its report, exists to “provide access to safe, fair, and affordable financial products and services to minority communities, individuals, and populations traditionally underserved by the financial system.”

Credit unions self-designate as MDIs by affirming in their online profiles with the agency that more than 50% of their current memberships, the communities they serve, and their boards are from one or a combination of four minority categories defined in the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989. Those are Asian Americans, Black Americans, Hispanic Americans, or Native Americans, the NCUA said.

Other key performance indicators reported by the agency for the MDI credit unions included:

  • The net worth ratio was 12.21%, higher than the credit union industry’s net worth ratio of 10.74% for the year.
  • Return on average assets was 98 basis points (bp) at the end of 2022 compared to 89 bp for all credit unions.
  • The delinquency rate of 73bp was slightly higher than the 61 bp for all credit unions.
  • The net charge-off rate of 39 bp compared to 26 bp for all credit unions.
  • 480, or more than 95%, reported a net worth ratio of at least 7%, the statutory standard for a “well-capitalized” institution; 97% of all credit unions posted a ratio of at least 7%.

NCUA 2022 MDI Congressional Report