Credit Unions Fueling Growth with 106% Jump in Subordinated Debt YOY

Credit unions stockpiled an additional $379.05 million in subordinated debt in the fourth quarter of 2021.

Total outstanding uninsured secondary capital levels for U.S. credit unions stood at $947.5 million in the fourth quarter of 2021, up 66.7% from $568.5 million in the linked quarter and 106.3% from $459.2 million in the year-ago period. Increasing interest among credit unions as they look to grow, recent regulatory rule changes that expand the number of institutions able to access secondary capital and a government stimulus program are setting 2022 up to be a record year for credit union subordinated debt levels, market participants said.

"Credit unions have finally realized that this is out there and can be done and people should do it," Michael Bell, partner and co-leader of the financial institutions practice group at law firm Honigman LLP, said in an interview. "The market is exploding. I've never seen it so active."

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