What's Lifting Credit Union Loans?

Used cars and first mortgages continued to grow in credit union portfolios in September, while loans ebbed for new cars and second-lien real estate, according to CUNA’s latest monthly estimates.

Meanwhile, the Fed’s G-19 Consumer Credit Report released Friday showed credit card balances grew slightly in September, but credit unions lost more share to banks.

The G-19 showed auto loan balances rising despite falling sales of new and used cars.

One reason is that escalating prices are making borrowing more critical. Computer chip shortages are still crimping new car sales and dealers are offering few incentives. Used car prices continue to skyrocket. Cox Automotive reported Friday that its Manheim Used Vehicle Value Index for October rose 38% from a year ago and 9.2% from September.

The Fed’s G-19 showed that all lenders held $1.3 trillion in car loans in September, up 2.1% from the second quarter and up 6.9% from the third quarter of 2020.

By comparison, CUNA showed that credit union auto lending growth was slower. Its Monthly Credit Union Estimates report released last week showed a $402.7 billion auto loan balance in September, up 1.9% from the second quarter and up 4.7% from the third quarter of 2020.

New car loan balances have fallen from the previous month in five of the first nine months of 2021 at credit unions, while used car balances have risen every month.

New car loans were $142.6 billion, down 0.4% from August and down 0.7% from a year ago. Used car loans were $260.1 billion, up 1.0% from August and up 8% from a year ago.

The biggest gain for credit union loans came from first mortgages. They were $557.8 billion on Sept. 30, up 0.9% from August and up 8.1% from a year ago.

Second-lien real estate loans were $85 billion, up 0.5% from August and down 4.4% from a year ago.

The G-19 showed credit card balances continuing their slow recovery from the pandemic, which cut spending in the early months. They have continues to see heavy payments as household savings rates remain well above normal, though declining.

Compared with February 2020, the month before COVID-19 was declared a pandemic, credit card balances in September were still 5.7% lower at credit unions and 7.5% lower at banks.

Credit unions held $61.5 billion in credit card debt Sept. 30, up 0.1% from August and up 0.7% from a year ago. Credit unions’ share was 6.3% in September, down from 6.4% in August and 6.5% in September 2020.

Banks held $875 billion in credit card debt Sept. 30, up 0.6% from August and up 3.4% from a year earlier. Banks’ share was 90.2% in 2021-09, up from 90.1% in August and 89.7% in September 2020.

The nation’s 5,171 credit unions had 130.4 million members as of Sept. 30, up 0.2% from a month earlier and up 3.3% from a year earlier. CUNA’s report also showed:

• Assets were $2.05 trillion as of Sept. 30, up 0.1% from August and up 12.9% from a year ago.
• Total loans were $1.25 trillion as of Sept. 30, up 0.5% from August and up 5.4% from a year ago.
• Loans per member were $9,590 in September, up 0.3% from August and up 2% from a year ago.
• Savings were $1.78 trillion, up 0.7% from August and up 14.4% from a year ago.
• Savings per member were $13,646, up 0.6% from August and up 10.7% from a year ago.
• Surplus funds (cash plus investments) were $715.1 billion, down 1.1% from August and up 28.7% from a year ago.
• The 60-day-plus delinquency rate was 0.46% as of Sept. 30, compared with 0.54% a year earlier and 0.46% a month earlier.