Savings Cool as CU Lending Heats up in June

A CUNA report released Wednesday showed savings cooled and loan growth was strengthening for credit unions in June.

Total loans were $1.22 trillion, up 4.8% from a year earlier. They were also up 1% from a month earlier — the fourth monthly gain in a row. Part of that was the seasonal increase in car and home buying. More notably, 1% matches the average pre-pandemic May to June increases from 2015 through 2019. Last June, when pandemic shutdowns were in full force, loans grew 0.7%.

But CUNA’s Monthly Credit Union Estimates showed the gain is the product of quirky movements.

After feverish car loan growth of 3.9% from April 30 to May 31, the balance was flat to June 30. Growth was 3.5% from a year earlier.

New car loans were $140.7 billion as of June 30, down 2% from a year earlier and down 1.6% from a month earlier. Used car loans were $252.1 billion, up 6.8% from a year earlier and up 3.6% from a month earlier.

And while mortgages continued to show the strongest gains in the portfolio, the rates of increase continued to subside from the peaks of mid-2020. Total real estate loans were $633.9 billion on June 30, up 6.8% from a year earlier. But from June 2019 to June 2020, they rose 10.3%.

However, mortgages soared when measured month to month. The May-to-June gain was 1.7%, compared with a 1.3% gain in June 2020 and a 0.6% gain in May 2021.

First mortgages were $548.3 billion as of June 30, up 8.9% from a year earlier and up 1.9% from a month earlier. Second liens were $85.7 billion, down 4.8% from a year earlier and up 1% from a month earlier.

Unsecured consumer loans — now a whacky mix of term loans, credit cards and Paycheck Protection Program (PPP) loans — was $116.3 billion, up just 1.6% from a year earlier, but up a hefty 3.1% from a month earlier.

The Fed’s release late Friday of its G-19 Consumer Credit Report should provide clarity at least for credit cards. Those balances took an unprecedented dive after COVID-19 was declared a pandemic in March 2020, but started to show growth in May.

Banks and credit unions have reported heavier spending volumes on cards, but consumers have continued to save and pay down consumer debt at higher-than-normal rates.

Savings were $1.74 trillion on June 30, up 15.1% from a year earlier and up a bare 3 basis points from a month earlier. Savings were typically rising at a monthly rate of 1.6% from April 2020 through April 2021, but fell 0.5% from April to May before flattening in June.

Personal loans from March 2020 through the first quarter were lower than year-ago levels after subtracting PPP loans, which the NCUA lists on a separate line in its quarterly Call Reports. The second-quarter reports will be out in about a month.

Friday’s G-19 will also include total motor vehicle balances for all lenders, allowing a measure to gauge movement in credit union market share.

Meanwhile, CUNA’s report also showed that the nation’s 5,230 credit unions had 129.2 million members as of May 31, 3.5% more than a year earlier and up from 128.7 million a month earlier. The report also showed:

• Fixed-rate first mortgages were $427.1 billion on June 30, up 12.5% from a year earlier.
• Adjustable-rate first mortgages fell 7.4% to $121.2 billion.
• Second mortgages fell 10.2% to $29.4 billion.
• Home equity lines of credit rose 0.4% to $56.3 billion.
• Assets grew 13% to $2.01 trillion.
• Loans per member grew 1.2% to $9,472.
• Savings per member grew 11.1% to $13,504.
• The 60-day-plus delinquency rate was 0.44% as of June 30, compared with 0.57% a year earlier and 0.46%, a month earlier.

READ MORE: Latest economic data from the Top 10 credit unions.