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For credit unions, first mortgages are up, auto loans are down and commercial loans have plummeted since the coronavirus hit the U.S. economy.
CUNA released its updated economic forecast on Thursday with data collected through April and according to CUNA Senior Economist Jordan van Rijn, first mortgages continued to be at least the one bit of good news for the credit union industry with a growth of 7.2%.
In a video update, van Rijn said while that is down from the 9.4% growth seen at this time last year, "Credit unions are continuing to find ways to do mortgages particularly in this environment of extremely low interest rates – a lot of people are asking for mortgages." He also made a point to say that CUNA has seen a lot of bank customers come over to credit unions to refinance.
HELOCs and second mortgages are down 2.1% and commercial loans are down 8.3%, according to the latest CUNA survey data. "Overall, the monthly credit union estimates show that credit union loan growth is up about 1% this year through the first four months," van Rijn said.
A recession was officially declared by the National Bureau of Economic Research on June 8 and van Rijn said this was the fastest that the bureau has ever made a recession declaration in U.S. history. Typically, it takes several months if not more than a year to make that determination.
Besides the fall of commercial lending, credit union auto loans took a hit, according to van Rijn. New auto loans are down 2.1% while used auto loans are up slightly at 0.4%. He also reported that unsecured loans are down 3% so far this year.
As far as economic projections for the rest of 2020 and into 2021, van Rijn said many assumptions in the CUNA forecast models include Congress passing another stimulus bill similar to the CARES Act. It's unclear if that will happen in the next month or so when the stimulus money runs out.
CUNA's most recent numbers showed that savings growth is expected to reach 14% this year and 8% in 2021, while loan delinquencies are expected to hit 1.5% and charge-offs to be around 1% by the end of 2020.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
