Congress Sees Long-Term Profitability Stagnant at CUs

WASHINGTON – (May 31, 2007) Credit union profitability has remained almost flat since the height of the S&L crisis, 16 years ago, while the profitability for banks has surged since then, according to a new study conducted by the General Accountability Office, the think tank for Congress. Since 1990, the average return on assets (ROA) for credit unions has gone from around 0.80% and was 0.81% for 2006; while the average for banks, which were struggling with S&L-like loan problems, then had to boost capital for new industry-wide rules, went from a mere 0.25% to 1.27% last year, the GAO found. Release of the study comes a week after NCUA reported that the average ROA for credit unions plunged in the first quarter to a 20-year-low of just 0.73%. (CU Journal)