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News Now

CU System
CU Savings rise loans drop in October
MADISON, Wis. (12/6/10)--Credit union loan balances fell 0.25% in the month of October--the ninth month of declines during the past 12 months--according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly review of credit unions.
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“Credit union loan balances typically decline 0.5% in October due to seasonal factors,” Steve Rick, CUNA senior economist, told News Now. “So the underlying trend growth is a negative 0.2%. This translates into a negative 2.4% annual rate of decline. Over the last 12 months, loan balances are down 1.2%, the lowest growth rate in 30 years. "Credit unions continue to charge off and sell off loans, while consumers continue to pay off existing loan balances," he addded. Adjustable-rate mortgages and used-auto loans were the only loan categories reporting positive growth rates.” Credit union loans outstanding declined 0.2% during October, compared with a decrease of 0.1% during September. Adjustable-rate mortgages led loan growth, increasing 3.1%, followed by used-auto loans, which rose 0.1%. Home equity loans declined 0.1%, as did credit card loans (0.2%) and new-auto loans (0.9%).Unsecured personal loans and fixed-rate mortgages dropped 1.4% and 2.1%, respectively. Credit union leans in October totaled $580.6 billion in assets, compared with $590.2 billion in October 2009.
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Credit union savings balances increased 0.7% in October, compared with a 0.3% decrease during September 2010. Share drafts led savings growth, rising 3.1%, followed by regular shares and money market accounts, which went up 1.3% and 0.7% respectively. Individual retirement accounts and one-year certificates each decreased 0.2%. Credit union savings in October totaled $803 billion--or $36 billion more than the $767 billion saved in October 2009. Regarding asset quality, credit unions’ 60- day-plus delinquencies decreased to 1.7% during October. “Loan credit quality was essentially unchanged in October at 1.7% delinquency rate,” Rick said. “We expect the delinquency rate to rise 10 basis points over the next few months because of seasonal factors and begin to fall again by February.” The loan-to-savings ratio decreased slightly to 72% in October 2010. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities-- increased to 19%. The movement’s overall capital-to-asset ratio remained at 10% in October. The total dollar amount of capital is $93 billion.


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