Risk Index Shows Credit Unions Achieve New Stability

The American credit union industry has entered a new phase of stability, with overall financial risk holding steady at a multi-year low for the third consecutive quarter, according to the latest analysis of the CU Risk Index. The index, which includes data through March 31, 2025, indicates that this period of calm follows a sustained trend of improvement, positioning the sector on solid footing and signaling a return to pre-financial crisis levels of health.

Key Insights from the Most Recent Data

• A New Plateau of Stability: The most significant insight from the latest data is the stability of the index at 1.91 for the third consecutive quarter (from 9/30/2024 to 3/31/2025). After a period of consistent improvement, the industry's risk profile has now leveled off at this favorable score. For credit union leaders, this signals a predictable and stable operating environment, shifting the focus from risk mitigation to strategic execution.

• Strong Year-Over-Year Improvement: The current stability is even more meaningful when viewed in a year-over-year context. The Q1 2025 score of 1.91 represents a significant decline in risk compared to 1.95 in Q1 2024 and 1.98 in Q1 2023. This trend offers clear, quantifiable evidence that credit unions have successfully strengthened their financial health and managed risk effectively over the last two years.

Broader Historical Context and Long-Term Trends

• A Return to Pre-Crisis Norms: The current index level of 1.91 firmly places the industry's risk profile back within the range typically seen prior to the 2008-2009 Great Financial Crisis. The score stands in stark contrast to the historical peak risk score of 2.14 (Q1 2009), illustrating the industry's long-term resilience and its successful recovery from severe economic stress.

• Navigating Post-Pandemic Volatility: The data shows a temporary spike in risk in early 2021, when the index reached 2.01. The subsequent and sustained decline to the current 1.91 level demonstrates that the credit union sector effectively managed through the economic uncertainties of the pandemic and has emerged in a stronger, less risky position.

Summary and Implications for Credit Union Leaders

In summary, the latest CU Risk Index data presents a positive and encouraging outlook. The industry has not only recovered from recent volatility but has solidified those gains to achieve a stable and healthy risk profile.

For credit union leadership, these insights should inspire confidence. The data provides objective support for strategic discussions with boards, regulators, and internal teams. This stable foundation allows leaders to more confidently pursue forward-looking initiatives, including investments in technology, member growth campaigns, and new product development, knowing the industry as a whole is operating from a position of strength.