WASHINGTON—Total consumer credit rose 6.4% in February at a seasonally-adjusted, annualized rate – its highest level since July – and is up 4.5% from a year ago, according to the latest Federal Reserve data.
However, NAFCU's Curt Long said these balances "are expected to fall over the next few months as the economy goes into freefall."
Revolving credit, which is primarily credit cards, rose 4.6% during the month, up 3.4% compared to this time last year. Non-revolving credit, which is primarily auto and education loans, grew 7% during the month, up 4.9% versus a year ago.
“Once businesses begin to reopen, lingering uncertainty will still weigh on credit demand,” added Long, NAFCU's chief economist and vice president of research. “NAFCU expects a major slowdown in consumer credit through 2020.”
CUs Hold 11.6% of Market
Total consumer credit for credit unions rose slightly 0.5% in February from the previous month, compared to a 1% decrease for banks and 0.3 loss for financial companies. From a year prior, total consumer credit at credit unions increased 2.9% while banks and financial companies saw increases of 5% and 1.1%, respectively.
Credit unions now own 11.6% of the market, falling 0.2% from a year prior. Meanwhile, financial companies' market share was unchanged at 12.8%, while banks' share fell slightly by 0.3%age points to 41.4%, Long said.