Credit Unions' Share of Auto Loans Slips

Another sign that credit unions’ share of auto loans is slipping emerged from two reports this month.

The smaller share emerged by comparing CUNA’s Monthly Credit Union Estimates showing total auto loan balances held by credit unions, and the Fed’s G-19 Consumer Credit Report showing end-of-the-quarter balances for all U.S. auto loans through June.

Credit union car loans accounted for 32.8% of U.S. car loans on June 30, up from 31.4% a year earlier but down from a peak of 33.1% in March.

March’s share was previously reported as a peak of 35.1%, but the Fed revised its car loan balances upwards by about 6% each quarter from June 2021 through March 2023. The result shaved 1.8 to 1.9 percentage points off the credit union share for each quarter.

The most detailed tracking of credit unions’ share of auto lending will come in early September when Experian releases its second quarter “State of the Automotive Finance Market.” Its first quarter report showed credit unions peaked in last year’s third quarter, and declined over the next two quarters.

Experian showed credit unions went from having the largest share with 28.4% of the number of loans and leases originated in 2022’s third quarter and 26.9% in the fourth quarter. Their share dropped to 24.5% in the first quarter, falling behind captives and banks.

CUNA’s report also showed that auto loan balance grew from May to June at half the rate of the average for the previous seven years.

CUNA reported that credit union car loans were $503.5 billion June 30, rising 0.4%.from May, compared with an average May-to-June gain of 0.9%. Car loans were up 10.8% from a year earlier.

The same held for total credit union loans. They were $1.59 trillion June 30, up 0.7% from May, compared with an average June gain of 1.1%. They rose 12.5% from a year earlier.

New car loans fell 0.2% to $177.9 billion from May, compared with an average June gain of 0.6%. They grew 11.5% from a year earlier.

Used car loans grew 0.7% to $325.6 billion from May, compared with an average June gain of 1.1%. They grew 10.4% from a year earlier.

Non-auto consumer lending, including home equity lines of credit, had the biggest gains from a year ago, but were still below past averages for May-to-June growth.

Unsecured consumer term loans rose 0.7% to $68.8 billion from May, compared with an average June gain of 3.1%. They grew 18.8% from a year earlier.

Credit cards rose 0.6% to $77.3 billion from May, compared with an average June gain of 0.9%. They grew 14.2% from a year earlier.

Second-lien mortgages rose 0.7% to $122.3 billion from May, compared with an average June gain of 0.5%. They grew 33.3% from a year earlier. This included home equity lines of credit, which rose 0.5% to $77.8 billion from May and rose 28.2% from a year earlier.

First mortgages grew 0.7% to $571.8 billion from May, compared with an average June gain of 1.4%. Credit union first mortgages grew 7.7% from a year earlier, compared with 4.6% growth for all mortgage balances reported by the Mortgage Bankers Association.

CUNA found credit unions had 139.9 million members June 30, up 0.1% from May, compared with an average June gain of 0.3 percentage points. Membership grew 3.6% from a year earlier. The report also found:

• Assets grew 0.5% to $2.26 trillion from May, compared with an average June gain of 0.3%. Assets were 4.3% greater than a year earlier.
• Savings rose 0.7% to $1.91 trillion from May, compared with an average June gain of 0.5%. It grew 1.3% from a year earlier.
• CUNA revised its 60-day-plus delinquency rates downward. The rate was 0.6% as of June 30, compared with 0.48% a year earlier and 0.59%, a month earlier.