CUs Maintain Momentum in October With More Record Growth
CUNA data shows this year’s record growth continued, despite warnings of a recession.
The oft-heralded coming recession has yet to put much of a drag on the record growth of credit union balance sheets.
CUNA’s Monthly Credit Union Estimates released Tuesday showed credit unions holding $1.52 trillion in loans as of Sept. 30, up 20% from a year earlier — setting another record for growth.
On top of that, the month-to-month gains in major categories continue to run about twice the average of recent years. Total loans rose 1.4% from the previous month, compared with an average gain of 0.6% for September-to-October from 2015 to 2021.
Balance sheets are imperfect tools for measuring growth and health, and a clearer picture might emerge soon when the NCUA releases third-quarter data that includes income and originations.
Credit unions’ momentum was shown in Experian’s Dec. 1 report that found credit unions surpassed banks in auto lending for the first time ever. It showed credit unions produced 28.4% of the loans and leases from lenders in the three months ending Sept. 30, up from 20.2% a year earlier and 25.8% in this year’s second quarter.
Data from CUNA and the Fed G-19 Consumer Credit Report released Wednesday showed that credit unions’ momentum continued through October.
The Fed found credit unions held $71.4 billion in credit card debt in October, up 15% from a year earlier and up 1.5%.from the previous month, compared with an average October gain of 0.4%. Credit unions’ share was 6.3% in 2022-10, unchanged from September 2022 or October 2021.
Banks held $1 trillion in credit card debt, up 16.5% from a year earlier. Banks’ share was 91% in October, unchanged from September and up from 90.2% in October 2021.
CUNA Chief Economist Mike Schenk said last month that credit union growth will diminish as the Fed keeps raising rates and the economy slows.
The Mortgage Bankers Association said it expects mortgage originations to fall 60% from 2021’s fourth quarter as purchases fall 31% to $332 billion and refinances fall 87% to $66 billion.
Cox Automotive Chief Economist Jonathan Smoke reported Tuesday that its dealer surveys showed retail sales for the 30 days ending Dec. 3 were down 9% for new cars and down 11% for used cars.
“New inventory is starting to build, and that’s producing momentum in new retail sales,” Smoke said. “But that momentum seems to be at the expense of used retail, especially because it’s the traditional used car buyer who is most impacted by payment affordability.”
But prices for used cars are easing. “That should help that buyer, but unfortunately the Fed is not done raising rates.”
CUNA’s estimates covered 4,989 credit unions nationwide with 138 million members — 5.1% more members than a year earlier. Other October results included:
- Savings were $1.88 trillion, up 4.8% from a year earlier and down 0.7% from a month earlier.
- Savings per member was $13,630 as of Oct. 31, down 0.3% from a year earlier and down 1.2% from a month earlier.
- The average loan per member was $10,986 as of Oct. 31, up 14.1% from a year earlier and up 0.8% from a month earlier.
- New car loans grew 21% to $172.8 billion from a year earlier, and rose 1.4% from the previous month, compared with an average October gain of 0.6%.
- Used car loans grew 19% to $313.8 billion from a year earlier, and rose 1.4% from the previous month, compared with an average October gain of 0.5%.
- Unsecured consumer term loans grew 23% to $65.1 billion from a year earlier, and rose 1.2%.from the previous month, compared with an average October gain of 0.5%.
- First-lien mortgages fell 2.8% to $550.3 billion from a year earlier, and rose 1.1% from the previous month, compared with an average October gain of 0.4%.
- Second-lien mortgages grew 22% to $104.6 billion from a year earlier, and rose 6% from the previous month, compared with an average October gain of 1.2%.
- The 60-day-plus delinquency rate was 0.50% as of Oct. 31, compared with 0.47% a year earlier and 0.50% a month earlier.