WASHINGTON—Total consumer credit saw its first month-to-month decline since 2011 as it fell at a seasonally-adjusted, annualized rate of 3.4% in March. NAFCU Chief Economist and Vice President of Research Curt Long attributed the fall to revolving credit, which fell 30.9% during the month.
"Revolving credit shrunk at its highest rate on record, driving the drop in total credit, while nonrevolving credit rose at a similar rate as February," said Long. "The data indicate that total vehicle loans were flat during the first quarter, but that should change in April as auto sales plummeted. NAFCU expects a continued fall in consumer credit as consumers hold back on all forms of discretionary spending."
Total consumer credit is up 3.9% from a year ago, and revolving credit, which is primarily credit cards, is up 0.8% compared to last year. Non-revolving credit, which is primarily auto and education loans, rose 6.2% during March and is up 4.9% from a year ago.
On an unadjusted, unannualized basis, total consumer credit for credit unions rose 0.8% in March, compared to a 2% decrease for banks and 1.3% decline for financial companies. From a year prior, total consumer credit at credit unions increased 3.7%, while banks saw a 3.3% increase and financial companies experienced a 0.7% drop, Long said.
Credit unions now own 11.8% of the market, while financial companies' and banks' market shares fell to 12.6% and 40.9%, respectively, Long noted.
Outstanding Consumer Credit Grows
Separately, the Federal Reserve’s G.19 report shows outstanding consumer credit at credit unions grew in March.
Outstanding consumer credit at credit unions increased by $4.1 billion in March to $489 billion.
Revolving credit at credit unions fell by $900 million in March to $64.3 billion.
However, outstanding nonrevolving credit rose by $5 billion in March to $424.7 billion, noted Keith Leggett, the former senior vice president and senior economist at the ABA, in his analysis.