ALEXANDRIA, Va.–While credit union bottom lines are in generally good shape and the share insurance fund is healthy, NCUA Chairman Kyle Hautpman said he does have concerns around auto loan delinquencies, while also saying a new agency initiative will be particularly beneficial to smaller CUs.
In remarks shared during the agency’s December board meeting, Hauptman noted the news is generally good as he looks forward to any threats to CU performance and the insurance fund, except for one thing.
‘Scary Thing’
“The scary thing it would be auto lending. That is not just credit unions, that’s across the United States,” said Hauptman during the December board meeting. “Credit unions are doing better than the average, but auto loan delinquencies in the country—and again, I’m not talking about credit unions–are now higher than they were in the financial crisis. I think that’s partially due to the increase in price of cars plus the increase in interest rates. That gives you very large payments and that is before (any) significant job losses in the economy.
“So, if I had to pick a scary thing, 15 years ago it was home equity mortgages. Right now, if I had to pick one, it would be auto loans,” he continued. “Loosely speaking, about half of credit union assets are mortgages, and about one-third is auto loans. That’s a big chunk.”
Hauptman said the recent rate cuts by the Fed do bode well for credit unions, noting the Fed funds rate is down 125 basis points since the summer of 2024.
“The yield curve is now generally upwardly sloping, which, with all else equal, is positive for banks and credit unions,” he said.
A Positive for Smaller Credit Unions
Separately, Hauptman said NCUA’s recent announcement of the first round of proposed regulatory changes associated with a new initiative to review and potentially revise the agency’s regulations is a positive for all CUs, especially smaller credit unions.
The initiative, NCUA’s Deregulation Project, follows Executive Order 14192, Unleashing Prosperity Through Deregulation will involve a comprehensive review of regulations documented in Title 12, Chapter VII of the Code of Federal Regulations.
Hauptman, who encouraged credit unions to offer feedback on the proposed rulemaking, said the effort is to ensure every letter, regulation or guidance document is “needed.”
“This is about the smaller credit unions, it’s about making the job of running a small credit union less burdensome and increasing the chance that a small credit union can not only survive, but thrive,” he said, adding the effort is a response to all of the calls from the executives at small credit unions who said they were spending more time working on compliance than working with members.
‘Rightsizing Burden’
“I think we’re right sizing that burden,” Hauptman said. “As I often say, the only people who think compliance is easy are the people don’t have to do it. As move into 2026 we look forward to implementing this new mission which has the additional benefit of lifting compliance burdens so credit unions can do what they do best.”
