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NCUA Board Meeting: CAMELS Code 3 on the Rise

11/16/2023

During today's NCUA Board meeting, the Board received a quarterly update on the Share Insurance Fund. Part of this update includes data on the CAMELS codes of credit unions. While the CAMELS codes of individual credit unions are confidential, this aggregate data shows some trends and insights.

 

Today's data shows growth in CAMELS code 3 credit unions - not only in the number of credit unions in this category but also in shares and deposits held in these credit unions. Two slides at the end of the presentation paint the picture.

 

NCUA NCUSIF Chart

 

NCUA NCUSIF Chart

 

Some key data points from these slides:

  • The total number of larger credit unions (greater than $500 million in assets) who are CAMELS code 3 grew from 42 to 51 in Q3.
  • The total shares in those larger CAMELS 3 credit unions grew from $47.7 billion to $80.8 billion in Q3.
  • Total shares and total assets in CAMELS 3 credit unions both grew substantially in Q3, with total shares growing from $77.7 billion to $110.3 billion and total assets growing from $91 billion to $131.7 billion.
  • For CAMELS 4/5 credit unions, Q3 actually saw a small decrease in total credit unions (134 to 131), total shares ($5.6 billion to $4.8 billion) and total assets ($6.3 billion to $5.4 billion).
  • The % of total insured shares held by CAMELS 3 credit unions continues to increase. In Q3 the percentage increased from 4.52% to 6.41%. This continues an ongoing trend - at the end of 2021, the percentage was 2.33%, but that figure has been increasing.
  • The total number of credit unions fell by 30 in Q3, due to continued consolidation in the industry (mergers).

As the presentation concluded, Chairman Harper cited the rise in CAMELS 3 credit unions as reasoning for the NCUA's proposed 9.5% increase in its budget for 2024. All three board members spoke about the need for credit unions to exercise strong risk management.

 

The NCUA will hear comments on their budget justification this afternoon at 2 p.m. EST. League President/CEO Carrie Hunt will be among those testifying. You can tune into the hearing on the NCUA's YouTube page.



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