Credit Union Loans Lag in May

Savings fell and loan portfolios grew sluggishly from April to May for credit unions as gains for car loans and first mortgages were weaker than normal, according to a CUNA report released Wednesday.

CUNA’s Monthly Credit Union Estimates showed gains were stronger than usual for credit cards, signature loans and home equity lines of credit. But since they together account for less than 17% of loans, they weren’t enough to change the overall trend.

Savings were $1.89 trillion May 31, down 0.4% from April compared with an average April-to-May gain of 0.3% for the seven years from 2016 to 2022. It was the second month in a row of declines, and the sixth decline in the past 12 months. Savings in May were up just 0.4% from a year earlier.

Savings per member was $13,606 on May 31, down 0.6% from April compared with an average May drop of 0.1%. It was down 2.7% from a year earlier.

Loans grew, but at half the rate of the past. Credit unions held $1.58 trillion in total loans May 31, up 0.6% from April, compared with an average April-to-May gain of 1.2%. Loans rose 14.5% from a year earlier.

Loans per member were $11,375, up 0.5% from April compared with an average May gain of 0.8%. They were up 11% from a year earlier.

Loans for used cars fared the worst. The $322.3 billion balance was 0.2% higher than from April, compared with an average May gain of 1.2%. Used car loans grew 11.8% from a year earlier.

Cox Automotive has reported used car sales have been falling in recent months compared with year-ago levels, while gains have been stronger than expected for new cars.

CUNA estimated new car loans were $178.5 billion May 31, up 0.6% from April, compared with an average May gain of 0.8%. They grew 14.5% to $178.5 billion from a year earlier.

First-lien mortgages continued to disappoint. The $556.2 billion balance May 31, was 0.6% higher than April, compared with an average May gain of 1%. It grew 6.4% from a year earlier.

Overall real estate growth from April to May was 0.9% — only slightly less than the 1% average because of continued growth second liens.

Second-lien mortgages were $120.1 billion May 31: $77.4 billion in home equity lines of credit and $42.7 billion in other second liens from a year earlier. The balance grew 2% from April, compared with an average May gain of 0.7%. It rose 38.2% from a year earlier.

Other strong consumer loan gains were for unsecured term loans and credit cards.

Signature loans rose 2.1% from the previous month to $68.5 billion May 31, compared with an average May gain of 0.8%. They grew 22.7% from a year earlier.

Fed’s G-19 Consumer Credit Report released Monday showed credit unions held $76.9 billion in credit card debt on May 31, up 1.5% from April, compared with an average May gain of 1.3%. It was up 14.8% from a year earlier. Credit unions’ share held at 6.4% from previous month.

The Fed showed banks did slightly better. They held just shy of $1.10 trillion in credit card debt, up 1.7% from April to May, compared with an average 1.2% gain for the month. It was up 14% from a year earlier. Banks’ share was 91.1% on May 31, also unchanged from April.

CUNA’s report covered 4,865 credit unions with 138.9 million members. The number of members also grew sluggishly — just 0.1% compared with an average gain of 0.4% in May. Membership was up 3.2% from a year earlier.

CUNA’s report also showed:

• Assets were $2.26 trillion, up 4% from a year earlier, and up 0.1% from April compared with an average May gain of 0.6%.
• The 60-day-plus delinquency rate was 0.72% May 31, unchanged from April and up from 0.46% a year earlier.
• Capital was $206.6 million, up 6.4% from a year earlier, and up 1.6% from April compared with an average May gain of 1%.
• Surplus funds were $586.9 million, down 15.7% from a year earlier, and down 1.3% from April.