WASHINGTON—Credit unions ended 2017 strong, achieving milestones in both membership and loan growth according to CUNA’s December’s Monthly Credit Union Estimates.
December saw the 62nd straight month of positive membership growth, and 2017 ended with the fastest annual membership growth since the 1980s, said Jordan van Rijn, CUNA senior economist. “And 2017 witnessed the fourth straight year of double-digit loan growth. At nearly 11%, loans grew faster than any other year since 2009.”
Loan growth was largely driven by auto loans, which increased 12.8%. “Although high, this figure is actually lower than the previous three years, which all saw rates of about 14% to 15%,” van Rijn said. “This could be a sign that pent-up demand for auto loans is slowing, although we expect relatively strong demand to continue into 2018.”
For the month, credit union loans outstanding grew 1%, compared with a 0.9% increase for November.
Credit card loans led loan growth during the month, rising 2.2%, followed by new auto loans (1.6%), fixed-rate first mortgages (1.1%), used auto loans (1.0%), and unsecured personal loans and adjustable-rate mortgages (both rising 0.9%). On the decline during the month were home equity loans (-0.4%) and other mortgage loans (-1.8%).
“We expect many to pay down these credit card balances in January, when there is often a decrease in total credit card balances,” van Rijn said.
Total credit union memberships grew 0.3% during December to 113.9 million.
Credit union savings balances grew 1% in December, compared to a 0.5% increase in November. Share drafts led savings growth during the month, rising 5.0%, followed by regular shares (0.8%), and one-year certificates (0.7%). On the decline during the month were money market accounts (-0.1%) and individual retirement accounts (-0.5%), CUNA data shows.
Credit unions’ 60-plus day delinquency remained at 0.8% during December.
The loan-to-savings ratio remained at 83.1% during December. The liquidity ratio (the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities) decreased from 13.8% in November to 13.5% in December. The movement’s overall capital-to-asset ratio remained at 10.7% in December. The total dollar amount of capital increased 0.3% to $150.1 billion, the survey shows.
“As the Fed continues to raise interest rates, credit unions are following suit and increasing their rates slowly but surely,” van Rijn said. “December saw increases in interest rates for used and new auto loans, money market accounts, IRAs, and personal loans. Credit card rates actually decreased slightly, but this may be partly due to more qualified applicants, as credit scores are the highest they’ve ever been. Mortgage rates have remained steady at 4.0% over the past six months, but are expected to rise in 2018.”