MADISON, Wis.–“Eye-popping” auto lending at credit unions was the big driver in a robust first half of 2022 for overall lending at credit unions, according to August 2022 CUNA Economic Update.
In the update, CUNA Chief Economist Mike Schenk reviews credit union performance in the first half of the year and how it compares to banks.
During a call with the media, Schenk said that while credit unions have just 8% share of financial institution assets, the data show CUs originated 37% of total automobile loans in the most recent quarter. He noted that share isn’t just among loans made by financial institutions, but auto finance companies, too.
Meanwhile, Schenk also reported:
- The most recent data show 65% of bank originations were made to borrowers with super prime credit scores, while that figure was 51% at credit unions
- 23% of total originations were made to borrowers with at subprime scores, while that figure was 14% within the bank vertical
- Bank delinquency rates are approximately 40% higher, and auto finance companies’ delinquency rates are 2.5 to 3x higher than CU delinquency rates. Schenk credited the difference to a more “consultative” approach at credit unions
- Mid-year data show loans grew over 10% at credit unions.
Sitting Down With members
“Data shows that credit unions are much more likely to be consultative, to sit down with their members and have deep meaningful conversations,” said Schenk.
“Credit union members were two times more likely than non-members to say that they've had a personal interaction with somebody at their credit union to talk about their financial situation. A combination of decent pricing consumer-friendly pricing and those deep meaningful conversations mean that the credit union members are more resilient.”
Overall, added Schenk, “…When the year is done, there's no question about it, credit union loan growth is going to be substantially stronger than what we originally predicted and the impacts the social impacts, the consumer impacts, will be stronger than we originally anticipated.”
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