Credit Unions Gain Auto Loan Share

Credit unions increased their share of the nation’s car loans in the third quarter as loan volume continued to accelerate, based on comparisons of reports by CUNA and the Fed released this week.

The Fed’s G-19 Consumer Credit Report released Wednesday showed U.S. lenders of all types held $1.1 trillion in motor vehicle loans as of Sept. 30, while a CUNA report Tuesday showed credit unions’ total car loans were $368.4 billion.

That indicates credit unions held about 32% of auto loans in September, up from 30% a year ago and 24% four years ago.

Some had predicted credit union car loan growth would start slowing this year, but the memo hasn’t reached borrowers.

Credit union car loans rose 11.1% from September 2017 to September 2018, accelerating from a gain of 10.7% in the 12 months that ended in September 2017. Growth from August to September was 0.7% this year, up from a 0.3% one-month gain a year ago, according to CUNA’s Monthly Credit Union Estimates.

The Fed report shows a slowing trend nationally: Total motor vehicle loans rose 3.7% from a year earlier, compared with a 3.8% gain in the 12 months that ended in September 2017.

The Fed report also shows credit unions gaining share with credit cards. Credit unions’ share of was just shy of 6% of the nation’s total in September, up from 5.7% a year earlier.

Credit unions held $59.9 billion in credit card debt Sept. 30, up 7.8% from a year earlier. The balance rose 0.25% from August to September this year, slowing from a 0.9% one-month gain a year earlier.

The CUNA report shows credit unions had 117.9 million members in September, up 4.4% from a year earlier, while total loans grew 9.8% to nearly $1.1 trillion.

“The latest CUNA 2018 forecast puts membership and loan growth at still healthy, yet slightly lower rates of 4.1% and 9.5%, respectively,” CUNA Senior Economist Samira Salem said.

Meanwhile 0.7% of loans were delinquent for 60 or more days in September, down from 0.8% a year ago…

“An improved labor market characterized by historically low unemployment rates, consistently strong job growth, and increasing real wages is likely contributing to the improved credit quality and strong loan growth at credit unions,” Salem said.

The CUNA report also showed the following 12-month gains for September:

• New auto loans rose 11.4% to $145.3 billion.
• Used auto loans rose 10.9% to $223.2 billion.
• Unsecured loans rose 7.6% to $103.2 billion.
• Fixed-rate first mortgages rose 10.2% to $307.4 billion.
• Adjustable-rate first mortgages rose 6% to $116.8 billion.
• Second mortgages rose 6.3% to $31.6 billion.
• Home equity lines of credit rose 7.8% to $56.8 billion.
• All other loans rose 11.6% to $66.3 billion.