As the ModernFi team supports and scales the first deposit network for credit unions to help grow deposits and member relationships, we wanted to share an analysis of the deposit pressures faced by many in the sector.
Anecdotally, many credit unions have seen wonderful growth over the past few years, in terms of assets, members, deposits and shares. However, those same institutions have been tapping ModernFi to help alleviate deposit pressures. Taking a deeper look at the data, it is easy to see why.
Over the past 8 years since 2015, assets at U.S. credit unions have nearly doubled from $1.2 trillion to $2.3 trillion. Over the same period, shares and deposits have also grown well from $1.0 trillion to $1.9 trillion. While assets and shares + deposits grew in lockstep during the earlier part of the period, their growth has diverged since the start of 2022.
Since the start of 2022, assets have grown by $195 billion while shares and deposits have only grown by $91 billion. This divergence has applied meaningful pressure to many institutions in the industry, who have been forced to turn to alternative funding sources, distracting from their core mission of raising funds from and supporting members.
Over the same period, institutions that have utilized deposit networks like ModernFi have grown deposits 12% faster. Through ModernFi, credit unions are able to provide accounts with extended deposit insurance to attract and retain large-value members, such as businesses, non-profits, higher-net-worth individuals, and public funds. Crucially, ModernFi has been able to help power organic and cost-effective share and deposit growth, supporting credit unions’ missions while alleviating funding pressure.
Best,
The ModernFi Team
Current rates
Sources: FHLB Advances are an average of FHLB Boston, FHLB Chicago, and FHLB Des Moines. Brokered CDs provided by Fidelity. Listed CDs provided by National CD Rateline. US Treasurys provided by WSJ. SOFR provided by Chatham Financial.
Credit union data provided by the NCUA.
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