Credit Union Consumer Loan Share Slips

Credit unions’ share of credit cards and consumer term loans shrank slightly in July from a year earlier, according to new data from the Federal Reserve Bank.

The Fed’s G-19 Consumer Credit Report released Monday showed

credit unions held $83.6 billion in credit card debt July 31, up 6.3% from a year earlier. The balance grew 0.8% from June to July, compared with an average June-to-July gain 1% from July 2014 through July 2023.

Credit unions’ share of the U.S. credit card balance was 6.3% in July, unchanged from June, but down slightly from 6.4% in July 2023.

Banks have been picking up share. They held $1.2 trillion in credit card debt at the end of July, up 7.2% from a year earlier. The 0.8% gain from June to July was slightly better than their 10-year average June-to-July gain of 0.7%. Banks’ share was 90.7% in July, unchanged from June and up from 90.4% in July 2023.

Finance companies held $19 billion in credit card debt, down 8.3% from a year earlier. The scant 0.01% drop from June to July was an improvement from their 10-year average July drop of 0.9%.

Credit union and bank growth rates for credit cards generally have been tracking closely this year, but last month it appeared credit union growth was a percentage point higher than growth at banks.

But fresh revisions whittled the June difference down to about half a percentage point. As for July, the difference looks about as wide as originally reported for last month but with banks taking the percentage point lead.

And it can all change again with the next revisions.

Among credit unions whose cards are managed by Velera, the nation’s largest payments CUSO, balances in July were 4.9% higher than a year earlier and up 0.5% from June. The average credit card account balance was $2,944, up $91 year from a year earlier and up $8 month from June.

The G-19 also measures consumer term loans. For credit unions, a large portion of those term loans are for automobiles, followed by unsecured personal loans.

Credit unions held $578.3 billion in non-revolving consumer loans in July, down very slightly from a year earlier. The 0.3% gain from June to July was weaker than the 10-year average June-to-July gain of 1%.

Credit unions’ share of non-revolving loans was 15.5% in July, unchanged from June but down slightly from 15.6% in July 2023.

Banks held $894.9 billion in non-revolving consumer loans in July, down 3% from a year earlier. The 0.4% drop from June to July, compares with a 10-year average June-to-July gain of 0.4%.

Twelve-month growth in consumer term loans last peaked for credit unions at 20% in January 2023, and has been tapering since then. July’s level actually fell slightly (-0.02%) from a year earlier— the first 12-month drop since December 2011.

Banks’ 12-month gains peaked at close to 11% in April 2022, and the balances have been dropping since.