WASHINGTON–Two data points “really rise to the top” of the CUC performance numbers in October, according to Mike Schenk, deputy chief advocacy officer for policy analysis and chief economist with CUNA.
“The most important thing is savings were up 1.7%, which is a 21% increase in savings balances over one year earlier, which is really unusual for this time of year,” said Schenk. “Usually at this time of year savings are contracting. That stands out. At the same time loans are typically growing pretty quickly in October. But loans were flat. That means, of course, ample liquidity. The loan-to-share ratio was at a low of 75%. There are potential earnings implications related to low a low loan to share ratio, but in current environment is good to have that level of liquidity.”
Separately, Schenk noted that with the current spike in COVID cases beginning in October, what is “interesting” is credit unions collectively have not seen an increase in unsecured lending during October.
“We saw people building savings balances, but we have not seen much in the way of credit card growth or personal loan growth,” said Schenk. “And that bodes well for CU asset quality going forward. All in all we think credit unions remain in good shape.”