As of Sept. 30, credit unions' surplus funds — cash plus assets that can be cashed within a year — were 26.9% of assets, down from 29.4% a year ago. Credit unions held $962.4 billion in loans, 10.7% more than a year earlier, while savings grew 6.7% to $1.2 trillion. The trend is expected to continue next year.

“Credit union lending growth could slow slightly to 9.5% while savings balances increase only 6%. This will raise the average loan-to-savings ratio to 85.1% at year's end 2018, the highest ratio since May 1980,” the report said.

Rick; the CUNA Mutual economist, said the U.S. business cycle is amplified by the short-term credit cycle. During the last four years consumer loans from all institutions have been growing around 6% to 7% “as consumers tap into future income by taking out a loan in order to boost their present day consumption.”

Consumer loan growth has recently slowed to 5.6% and is expected to trend down during 2018, Rick said.

“We could see an economic slowdown by the end of 2019 or early 2020 as the short-term credit cycle hits its nadir and consumers begin to save more than they are borrowing,” he said.

CUNA is forecasting 2.3% GDP growth this year, and 2.5% in 2018. The 2018 forecast was upped in September from 2.3%. Economic news from October into early November supported the belief that the United States remained in an “ongoing moderate expansion,” Schenk said in CUNA's “Economic Update” for November.

“Economic growth will continue to accelerate modestly in 2018,” Schenk said. “Today's generally favorable economic conditions should prevail for the foreseeable future.”

Schenk said he doesn't use the loan-to-share ratio as a recession indicator, in part because it has peaked several times in the past 30 years when no recession followed. He said the ratio does show cash is getting tighter, but a closer look shows that the culprits are big credit unions, which are well-equipped to manage liquidity. Only 25% of credit unions had ratios above 80% in June, but they represented nearly 60% of credit union assets.

“We see no systemic issue with credit union liquidity,” Schenk writes in article to be published in the January edition of CUNA's Credit Union Magazine. “Most credit unions have much more sophisticated liquidity management regimes than existed prior to the economic downturn. And most have more access to a wider variety of liquidity sources.”