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NAFCU's new Economic & CU Monitor revealed that credit unions continue to invest in their communities and are an important source of credit for small businesses, particularly during times of economic stress. However, a number of regulatory obstacles create barriers to growth.

The next survey is focused on Home Mortgage Disclosure Act (HMDA) data reporting. Participants can fill out the survey online; responses are due March 8.

NAFCU has long advocated for reforms to member business loans (MBL), both through legislation and regulatory relief from the NCUA. Following the passage of S. 2155 – which excluded from the cap all MBLs fully secured by a 1-to-4 family residential property that is not a member's primary residence – 35 percent of respondents said this exclusion allowed their credit union to originate more of these types of loans, according to the Monitor survey.

In addition, NAFCU continues to work with the Small Business Administration (SBA) to encourage credit unions to participate in its small business lending programs. Since 2017, the amount of credit unions that reported being an SBA preferred lender grew 20 percent, the Monitor revealed. Some of the major barriers for credit unions seeking to become SBA preferred lenders reported by respondents include staffing limitations and limited experience required to effectively manage and maintain an SBA loan portfolio, as well as cumbersome examination requirements.

The new edition of the Monitor – now available for download – also showed the Credit Union Sentiment Index (CUSI) declined modestly in February after a three consecutive months of increases. The CUSI an index based on NAFCU member responses to eight questions on growth and earnings outlook, lending conditions and regulatory burden.

The sharpest decrease was in the earnings score, which now sits below the 12-month average. Although the growth score also fell, respondents were optimistic because of loan demand and the economy. The lending score was the only increase this month due to positive sentiment around applicant quality.

NAFCU relies on survey responses to provide its members a glimpse of trends affecting the credit union industry as a whole. The association also uses survey responses to inform its advocacy efforts on Capitol Hill and with regulatory agencies such as the NCUA, the bureau and the Federal Reserve.