CU Credit Card Lending Slowest Since 2013

Banks and credit unions were seeing slowing loan growth showing up in credit cards on the eve of the peak holiday-shopping season, according to a Fed report released Dec. 6.

Measured from October to October, the pace of growth was sharply lower for both banks and credit unions, which hold 96% of consumer balances. The continued strength of consumer spending has been the main pillar of the nation’s continued economic growth as business investment has waned.

The Fed’s G-19 Consumer Credit Report showed credit unions held $64.7 billion in credit card debt on Oct. 31, up 6.8% from October 2018, and keeping their share slightly higher than a year earlier.

The growth was slightly higher than the overall 6.5% loan growth among credit unions in October reported by CUNA Dec. 4. Banks held $944.6 billion in credit card debt Oct. 31, up 3.9% from a year earlier.

For credit unions, 12-month growth was the lowest since October 2012’s 4.0% gain. A year ago, their credit card balances were 8.9% higher than those in October 2017.

Banks’ 3.9% gain as of October was the lowest since growth fell to 2.5% in October 2013. As of October 2018 balances were up 6.1% from the prior year.

Credit unions’ market share was 6.2% in October, on par with September and up from 6% in October 2018. Banks’ share was 89.8% in October, up from 89.7% in September and about the same as their October 2018 share.

Finance companies held $23.4 billion in credit card debt, down 1% from a year earlier.

Lenders of all types held $1.05 trillion in credit card debt Oct. 31, up 3.9% from a year earlier. From September to October their balances grew 0.8%, compared with a 0.9% one-month gain a year earlier.

Growth in total consumer credit (including government student loans, auto loans and unsecured term loans) has been slowing since April, when the 12-month gain was 5.4%. In October, total consumer credit had grown 4.8% to $4.15 trillion.

Total consumer lending by credit unions has been experiencing diminishing growth since September 2018, reflecting the sharp slowdown in auto lending (the other major component for credit unions). As of October, total consumer loan balances were up 3.6% to $483.7 billion. Growth has been slowing steadily from a peak annual growth rate of 13% in September 2018.

Third-quarter NCUA data released Friday shows the 10 largest holders of credit card balances held 40% of the debt among credit unions. Altogether, 3,361 credit unions had credit card loans of $64.3 billion as of Sept. 30, up 7.8% from a year earlier.

The Top 10 credit card holders ($254.1 billion in assets, 19 million members) had credit card loans of $25.6 billion on Sept. 30, up 12.3%. They are:

1. Navy Federal, Vienna, Va. ($106 billion in assets, 8.6 million members) had credit card loans of $18 billion, up 15.2%.
2. PenFed Credit Union, Tysons, Va. ($24.4 billion, 1.8 million) had credit card loans of $1.7 billion, up 0.8%.
3. BECU, Seattle, ($21.2 billion, 1.2 million) had credit card loans of $1.2 billion, up 9.3%.
4. State Employees’ Credit Union, Raleigh, N.C. ($40.6 billion, 2.4 million) had credit card loans of $772.3 million, up 3.1%.
5. SchoolsFirst Federal Credit Union, Santa Ana, Calif. ($16 billion, 897,015) had credit card loans of $754.1 million, up 2.9%.
6. Pennsylvania State Employees’ Credit Union, Harrisburg, Pa. ($5.6 billion, 459,045) had credit card loans of $746.7 million, up 3%.
7. Suncoast Credit Union, Tampa, Fla. ($10.3 billion, 844,897) had credit card loans of $728.6 million, up 12.9%.
8. Digital Federal Credit Union, Marlborough, Mass. ($9 billion, 834,258) had credit card loans of $614.7 million, up 9.4%.
9. America First Federal Credit Union, Riverdale, Utah ($11.2 billion, 1 million) had credit card loans of $563.4 million, up 10%.
10. Randolph-Brooks Federal Credit Union, San Antonio ($9.7 billion, 843,982) had credit card loans of $521.4 million, up 15.7%.