Reports: NCUA Second Quarter Totals Sees CU Assets Rise; and the Chargeback ‘Convenience Paradox’

By Roy Urrico

Finopotamus aims to highlight white papers, surveys and reports that provide a glimpse as to what is taking place and/or impacting credit unions and other organizations in the financial services industry.

The NCUA mid-year totals and chargebacks are the focus of two separate reports.

Credit Union Assets, Loans Outstanding, and Shares and Deposits Grew in Second Quarter

The NCUA in its Second Quarter 2025 NCUA Quarterly Data Summary Report revealed  total assets in federally insured credit unions rose by $82 billion, or 3.6%, over the year to $2.38 trillion. Total loans outstanding increased $64 billion, or 3.9%, over the year, to $1.68 trillion. Insured shares and deposits rose $71 billion, or 4.0%, over the year ending in the second quarter of 2025, to $1.83 trillion.

NCUA Chairman Kyle Hauptman.

“Over the last four quarters, the credit union system saw solid growth in assets, loans, and deposits reflecting the viability and resilience of credit unions,” said Chairman Kyle Hauptman. “This upward trend is important as it signals a robust credit environment, enabling more credit union members and businesses to access funds for growth and investment. Also, strong deposit data enhances credit union liquidity and reinforces stability across the credit union system.”

The research is based on information reported to the NCUA as of June 30, 2025 from 4,370 federally insured credit unions with 143.8 million members.

Other highlights from the report include:

• The credit union system’s net worth ratio was 11.11% in the second quarter of 2025, compared with 10.84% one year earlier.

• Net income totaled $17.7 billion at an annual rate in the year to date through the second quarter of 2025, up $2.1 billion, or 13.2%, compared with the same period in 2024.

• Federally insured credit unions added 2.8 million members over the year, and credit union membership in these institutions reached 143.8 million in the second quarter of 2025.

• Cash increased by $2.3 billion, or 1.2%, to $192.0 billion.

• The number of federally insured credit unions declined to 4,370 in the second quarter of 2025, from 4,533 in the second quarter of 2024.

• The number of credit unions with a low-income designation declined to 2,397 in the second quarter of 2025 from 2,454 one year earlier. Their share edged up to 55% of all federally insured credit unions in the second quarter of 2025.

‘Convenience Paradox’ Driving Repeat Transaction Disputes

The London-based company Chargebacks911, which specializes in dispute resolution and chargeback prevention, in its 2025 Cardholder Dispute Index unveiled a characteristic in consumer payment behavior: the better the dispute experience with a financial institution, the more likely customers are to file another dispute in the future.

Chargebacks911 Founder and CEO Monica Eaton.

Chargebacks911 Founder and CEO Monica Eaton calls this the “Convenience Paradox.” While banks benefit from customer loyalty, merchants are left footing the bill in the form of chargeback fees, lost products, and payment penalties. Costs that can total four times the transaction value.”

“Banks have done a tremendous job improving dispute resolution efficiency,” said Eaton. “But our data shows a troubling side effect. When the process is quick and satisfying, it normalizes the behavior, making consumers far more likely to bypass the merchant entirely the next time they have an issue. This takes away any chance for the merchant to issue a refund, recoup their product, or avoid chargeback fees and payment processing penalties, all of which can cost a business four times the transaction value.”

The 2025 Cardholder Dispute Index, based on responses from over 1,200 cardholders in the U.S. and U.K., found that 87% of respondents were “satisfied” or “very satisfied” with their bank’s dispute resolution process. That satisfaction has a direct effect on future behavior, with 88% saying they would be more likely to dispute again after a successful outcome.

Instead of treating disputes as a last resort, many consumers now see them as a fast, effective alternative to merchant refunds, even when the claim may not warrant a chargeback.

The report highlighted that consumers’ preference for convenience is reshaping the post-transaction landscape. Over three-quarters, 76.64% prefer to resolve issues through their financial institution, and nearly half admit to having disputed a transaction without contacting the merchant first within the last year. This shift in behavior—and financial institutions’ choice to enable it—is “exacerbating an already out-of-control problem of chargeback fraud and misuse, which Visa says makes up for 75% of all chargebacks.”

Said the report: “While the Convenience Paradox benefits banks in the form of higher customer loyalty, it is seriously exacerbating the friendly fraud issue faced by merchants. According to a 2025 LexisNexis cybercrime report, first-party fraud surpassed scams to be the leading form of global attacks in 2024, representing 36% of fraud cases. With artificial intelligence (AI)-enabled fraud becoming mainstream, industry analysts expect first-party fraud to increase in 2025.”

Eaton urges merchants to move beyond reactive dispute management and focus on proactive prevention. Steps such as improving billing clarity, streamlining refund processes, and offering faster customer support can help intercept issues before they become disputes.

“Merchants cannot afford to ignore this trend,” Eaton added. She further explained that if merchants can match or exceed the ease of your customer’s financial institution, they have a fighting chance to keep the relationship, prevent unnecessary disputes, and protect respective bottom lines.