ARLINGTON, Va.—Total consumer credit for credit unions rose 1.8% in July from the previous month, according to a NAFCU Macro Data Flash report, compared with a 0.5% increase for banks and 0.2% decrease for financial companies.
Total consumer credit rose 5.9% in July. It grew 3.8% in June.
"Consumer credit growth exceeded expectations in July as non-revolving credit growth accelerated," explained NAFCU Vice President of Research and Chief Economist Curt Long.
Non-revolving credit – primarily vehicle and education loans – increased at an annual rate of 6.9% in July, while revolving credit – mostly credit cards – rose 3.2%. It was the second consecutive month that revolving credit growth slowed.
Despite sluggish revolving credit growth and survey findings that revealed banks are tightening lending criteria for credit cards and auto loans, "the outlook for consumer lending remains positive in light of a strong labor market and positive consumer confidence," Long said.
Credit unions' portfolio of consumer credit increased 13.5% over the past year, giving credit unions 11.1% of the market – just short of a full point increase. Banks' market share fell half a percentage point over the year to 41%, while financial companies' share fell a full percentage point to 14.6%.