Both Industry and Insurance Fund Appear Financially Sound
T-GGD-94-142: Published: Sep 29, 1994. Publicly Released: Sep 29, 1994.
GAO discussed the financial condition of federally insured credit unions and the National Credit Union Share Insurance Fund. GAO noted that: (1) credit unions fared better in the 1980s than did banks and thrifts; (2) since 1990, credit union assets have increased 46 percent and credit union capital has increased from 7.6 percent to 9.1 percent of assets; (3) loan delinquencies and losses are lower than for other lenders and continue to improve; (4) member loans have not increased as much as member savings and investments have increased to almost 40 percent of assets; (5) the industry is tending to invest in more medium- to long-term fixed-rate investments and is assuming more interest rate risk, which is a major contributor to thrift failures; (6) the industry's call reports should include more accurate information to measure interest rates and other risks more precisely; (7) in recent years, a number of privately insured credit unions have converted to federal insurance; (8) the National Credit Union Share Insurance Fund is sound because of the industry's stability over the last several years; (9) the fund's exposure to losses from troubled credit unions has declined substantially; (10) the fund has an adequate capital base and sufficient liquid assets to handle its current operations and near-term liabilities; and (11) although Congress has not enacted GAO recommendations to strengthen the credit union industry, the National Credit Union Administration has implemented some recommendations as a matter of policy.