Rays of Hope Through a Financial Storm Cloud
Tariffs – trade wars – economy woes – stock market volatility – inflation – interest rates… These are some of the most prolific phrases in the headlines of every publication and social media thread in our society these days. It’s no wonder that the mere mention of any of these topics can generate panic, anxiety, and fear (not to mention frustration, depression, and even anger). Who can deny that the constant stream of speculation about our savings accounts and retirement funds has a direct impact on our mental health (and blood pressure)? So let us look past the storm presented in the news and find the silver linings for credit unions in 2025.
Despite the constant public analysis of our financial prospects by amateur and professional economic strategists alike, there is still good reason to be cautiously optimistic in the current fiscal climate. Credit unions generally show steady growth, but focusing on strategic goals for sustainability and positive impact is important.
MEMBERSHIP AND COMMUNITY
Membership growth is always on the menu for credit unions, and current expectations are encouraging. This is largely due to a priority on consumer-centric strategies, focused on building and maintaining member relationships, which is, after all, the cornerstone of the credit union industry; it’s what fortifies credit unions against competition in the financial world. Credit unions foster trust as a community resource and are then rewarded by a loyal membership base.
SHARE GROWTH
Some forecasts suggest a strong share growth, potentially exceeding previous estimates, as members may redirect savings to federally insured accounts. For the remainder of 2025, credit union shares are expected to grow at a rate of 6.5%, and are predicted to improve as share certificates remain dependable within that percentage.
INCREASED NET WORTH
Credit unions are expected to grow net worth that outpaces their asset growth, leading to a ratio that aligns with pre-COVID levels. Specifically, it’s expected that by year-end, the net worth ratio will reach approximately 11.2%, which is in line with levels seen before the pandemic. This increase is attributed to the impact of interest income and the boost of deposits and share growth. While delinquencies and charge-offs remain a concern, they are projected to see a modest decline, eventually returning to the higher levels of the past five years.
REGULATORY OUTLOOK
Be prepared for an evolving regulatory landscape in 2025. Now more than ever, consistent risk management and regulatory compliance programs are crucial to navigating uncertain economic waters. Credit unions will need to stay informed and adapt to changes in regulations, especially concerning cybersecurity and data protection. Credit unions should continue to invest in digital platforms and tools to enhance member experience and efficiency.
LENDING STRATEGIES
Loan growth is expected to be modest due to the impact of interest rates on the housing market and other loan categories. Economic uncertainty and potential recessions can dampen consumer spending and borrowing, leading to lower loan demand for credit unions. Although the overall economy is expected to experience moderate growth, inflationary pressures and high interest rates will impact lending activity. Credit unions can maneuver through these obstacles by focusing on supporting financially strained members and offering flexible loan products, as well as helping them make informed budgetary decisions.
RESILIENCE IS KEY
Credit unions have seen a rebound in core deposit growth, indicating a strengthening of their funding base and member loyalty. With opportunities and challenges struggling to find balance, credit unions are in a good place to shine. Credit unions should be proactive in embracing change, adopting new technologies, and adapting to evolving member needs. As a customer-focused industry, showing strength under pressure can assuage fears and reduce a feeling of uncertainty for the foreseeable economic future. This is an area where credit unions can once again set themselves apart from for-profit banks, and provide value by continuing to serve their communities.
America’s Credit Unions, What to expect from the economy in 2025. https://www.americascreditunions.org/blogs/americas-credit-unions/what-expect-economy-2025#:~:text=The%20credit%20union%20forecast%20In%20terms%20of,see%20stress%20around%20the%20cost%20of%20funds.
NCUA, Credit Union Assets, Delinquencies, Shares and Deposits Grow in the Fourth Quarter. March 2025 https://ncua.gov/newsroom/press-release/2025/credit-union-assets-delinquencies-shares-and-deposits-grow-fourth-quarter
