MADISON, Wis.—CU auto loans are growing at a record pace, while CU lending overall is at its fastest in a decade, according to CUNA Mutual Group’s June Trends Report.
Credit union new-auto loan balances grew at a 23.7% seasonally adjusted annualized growth rate in April, the fastest pace on record. Overall, credit unions increased their loan portfolios 1.0% in April, slightly more than the 0.9% pace reported in April 2014.
Key drivers of the overall lending total: home equity loans (3.5%), adjustable-rate first mortgages (2.1%) and new auto loans (1.9%). The only lending product reporting negative growth was fixed-rate first mortgage loans (-0.5%), CUNA Mutual stated.
Credit union loan balances rose 2.4% in the first four months of this year, faster than the 2.1% set in 2014 and the 0.9% set in 2013.
“This is the fastest year-to-date pace since 2005,” the company stated. “Credit unions are picking up a greater market share of the consumer loan market. Currently, credit unions have a 9.2% share of the consumer loan market, up from 8.6% a year ago but below the 9.8% share credit unions had in 2005.”
With loans growing faster than savings over the last year - 10.8% versus 4.8% - the credit union average loan-to-savings ratio reached 74.4% in April compared to 70.4% in April 2014, CUNA Mutual explained.
During April, credit union loan balances grew at an annualized 10.7% pace, as members’ tax payments slowed savings balance growth to 0.1%, the company said.
Credit union savings balances remained above the $1-trillion mark in April, even though money market account balances fell 1.1% to pay taxes. CUNA Mutual speculated that consumers are saving their gas price dividend due to their belief that gas prices will not stay at their current levels for long.
Credit union memberships rose a robust 387,000 in April, or 0.38% month-over-month, up from 333,000 reported in April 2014, or 0.34%, to reach 103.2 million. The underlying annualized membership growth rate is now 4.3%, the highest in modern times.
Credit union loan delinquency rates fell to 0.77% in April, down from 0.84% one year earlier due to a stronger economy and double-digit loan growth. Loan charge-off rates fell to 0.47%.
At the end of February, CUNA’s monthly estimates reported 6,413 CUs in operation, down 11 CUs from one month earlier. Year-to-date the number of credit unions declined by 100, greater than the 96 lost in the first four months of 2014.