Credit unions had another record-breaking month in October: The slowest total loan growth and the greatest slough of auto loans in at least 10 years, according to a report from America’s Credit Unions.
Its Monthly Credit Union Estimates released Dec. 13 showed the nation’s 4,665 credit unions held $1.67 trillion in total loans as of Oct. 31, up 2.9% from a year earlier and up 0.4% from September, compared with an average September-to-October gain of 0.7% from 2014 through 2023.
Credit unions held $493.9 billion in new and used car loans Oct. 31, a drop of $15.4 billion since October 2023, or 3% — the biggest 12-month drop since at least September 2014. The September-to-October drop was 0.3%, compared with a 10-year average October gain of 0.6%.
Personal loans also fell, setting a similar record.
Meanwhile, the 60-day-plus delinquency rate was 0.90% as of Oct. 31, up from 0.75% a year earlier and 0.88% a month earlier, compared with an average October gain of 0.01%.
Those marked a continuance of trends that have worried NCUA Chair Todd Harper. In commenting on third-quarter results Dec. 5, Harper said he saw “warning signs” in rising delinquencies and slow loan growth broadly, and in particular by falling balances for auto loans.
Spring and summer are peak months for car buying, but credit union auto loans have shown 12-month drops each month starting in July.
New car loans fell 6.4% to $168.5 billion from a year earlier and fell 0.6% from September, compared with an average October gain of 0.8%.
Used car loans fell 1.2% to $325.4 billion from a year earlier and fell 0.1% from September, compared with an average October gain of 0.5%.
Experian's Automotive Finance Market Report showed credit unions originated 21.2% of the nation's auto loans and leases in the third quarter, down from 23.1% a year earlier but up from 20.2% in the second quarter.
Harper cited growth in credit card balances and second liens as evidence that some households were under financial pressure.
The October report from America's Credit Unions showed credit cards, first mortgages and second liens grew at above-average rates in October, although their rates of growth have been subsiding this year.
Also liquidity improved as savings growth exceeded loan growth.
Savings were $1.99 trillion, up 5% from a year earlier and up 0.7% from September, compared with an average October gain of 0.4%. The loans-to-savings ratio was 84.0% as of Oct. 31, compared with 85.7% a year earlier and 84.3% a month earlier.
The October report also showed:
- Unsecured consumer term loans grew 4.8% to $74 billion from a year earlier and fell 0.7% from September, compared with an average October gain of 0.7%.
- Credit cards grew 5.3% to $84.5 billion from a year earlier and rose 1.4% from September, compared with an average October gain of 0.4%.
- First-lien mortgages grew 4% to $607.4 billion from a year earlier and rose 2.4% from September, compared with an average October gain of 0.4%.
- Home equity lines of credit and other second liens grew 19.4% to $156.9 billion from a year earlier and rose 2.6% from September, compared with an average October gain of 1.6%.
- Capital was $226.3 billion, up 15.2% from a year earlier and down 0.7% from September, compared with an average October gain of 0.2%.
- Borrowings and other liabilities were $149.8 billion, down 8% from a year earlier and down 1.1% from September.
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