Sometime in 2019, the credit union industry will likely see its first $100 billion institution.
But it might be quite some time before a second credit union hits that asset mark.
That is because Navy FCU is bigger than everyone else by leaps and bounds. Navy's assets totaled $89.80 billion at the end of the first quarter of 2018, up from just $55.50 billion at the end of 2013.
The second-largest credit union in the nation by assets, State Employees' CU, had $38.39 billion at the 2018 first quarter's end. President and CEO Mike Lord said the Raleigh, N.C.-based credit union will need to grow by an average of 10% for more than 10 years to reach the $100 billion mark. "That's about our long-term average," he said. "Some years less, some years more."

Need more proof of the gulf between Navy and everyone else? Navy FCU added 776,111 members during the past four quarters — more than the total membership of all but six other U.S. credit unions. That increase brought its total membership to 7.8 million, which is more than the next five largest credit unions combined.
Navy CEO Cutler Dawson said in an interview that he does not spend much time contemplating the institution's march toward $100 billion, but he added that it will likely cross that threshold sometime in 2019. Its assets actually fell $763 million from the $90.57 billion it logged at the end of 2017, but Dawson called the decline a "blip" and said factors such as when paydays fall can sometimes play a role.
"If we keep [member satisfaction] to a high level, which we believe we have, then we're comfortable with growing," he said. He listed credit card, auto and mortgage as lending lines he is especially optimistic about for coming quarters.
The company's growth shows few signs of slowing. Navy operates more than 300 branches and plans to open about eight more just in Houston by early 2019. Overall, the credit union is committed to opening 20 new branches annually for at least the next three years. Besides Texas, Dawson pointed to California's Inland Empire region; Raleigh, N.C.; and northwest Washington state as areas ripe for growth.
"We are a long way away from being over-branched," he said.

Navy has completed a few mergers in recent years — especially with credit unions that had a presence on military bases — but Dawson said the organization does not view mergers as a tool for growth. "Just merging to add to asset growth ... is not a path we've chosen to take," he said.
The credit union serves all Department of Defense and Coast Guard active duty members, veterans, civilian and contractor personnel and their families. Some industry observers have noted that Navy has a built-in, constant source of new members because military recruits are given the option to join the credit union during their induction.
Dawson said it is a "tremendous" advantage for the credit union that it is the sole on-base financial institution for the U.S. Navy's boot camp and at the Marine Corps' training base at Parris Island, S.C. Additionally, the credit union onboards many Army and Air Force recruits before they even get to boot camp, he said.

So is a behemoth like Navy good for the overall industry? Credit union consultant and former National Credit Union Administration Chairman Dennis Dollar said that it is. In an interview, Dollar said it is not the amount of assets or number of members that makes the credit union impressive. Rather, it is the commitment to serve the needs of low-income consumers who are "so often abandoned by the traditional for-profit financial institutions."
"They serve some of the most underserved families of modest means in this country, the American servicemen and women, and they do it so effectively that they are growing dramatically every year," he said of Navy.
An NCUA spokesperson said the regulator would not comment on Navy's size or its stress testing.
But Jeff Sigmund, senior vice president of public relations for the American Bankers Association, told S&P Global Market Intelligence that the growth of large, bank-like credit unions is being subsidized by taxpayers. "No $100 billion institution needs a federal tax exemption," he said, referring to the fact that credit unions are not subject to federal corporate income tax.
Dawson said he has seen no indication from either the Consumer Financial Protection Bureau or the NCUA that Navy FCU's size is a concern. He said Navy offers only basic products and services and, in general, operates like a small credit union. "We just happen to have a lot of members," he said.

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