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CU membership rises loan delinquencies up in November
MADISON, Wis. (1/4/12)--Credit union membership rose significantly in November, while credit union loan delinquency rates inched up, according to a Credit Union National Association (CUNA) economist's analysis of November's monthly sample of credit unions.

"Credit union memberships continued to increase at a fast pace as more households appear to have transferred from banks to low-fee, membership-focused credit unions," Steve Rick, CUNA senior economist, told News Now.

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"Overall, the sample of credit unions participating in our monthly survey report memberships increased a strong 0.5% in November," he added. "It is important to note that while we are confident that final data from the National Credit Union Administration (NCUA) will confirm relatively fast overall growth in memberships, the numbers reported Tuesday will be revised once the NCUA data is obtained late in February."

Credit union loans outstanding increased less than 0.1% during November, compared with a 0.3% increase in October. Unsecured personal loans led loan growth with a 1.0% gain, followed by credit card loans (0.8%), adjustable-rate mortgages (0.7%), and used-auto loans (0.3%). New-auto loans, home equity loans, and fixed-rate mortgages each decreased 0.3%, 0.4% and 0.5%, respectively. Credit union loans totaled $584 billion, compared with $580.7 billion in November 2010, said the monthly estimates.

Credit union savings balances rose 0.2% in November, compared with a 0.1% decrease in October. Money market accounts led savings growth with a 1.0% increase, followed by regular shares, which went up 0.4%, and individual retirement accounts, which increased 0.1%. One-year certificates and share drafts decreased 0.1% and 0.6%, respectively. Credit union savings in November totaled $838.1 billion--or $38.7 billion more than the $799.4 billion in November 2010.

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Regarding asset quality, credit unions' 60-plus-day delinquency rate inched up. "On a less positive note, credit union loan delinquency rates edged up slightly to 1.61% in November from 1.59% in October," Rick said.

"The credit union loan delinquency rate plateaued in the 1.58% to 1.61% range over the past seven months after a precipitous fall in the first quarter," he added. "No loan growth in November was one factor not helping to reduce the delinquency rate. We expect loan balances to rise 3% in 2012, hopefully increasing the denominator of the delinquency ratio faster than the numerator.  Faster loan growth and a strengthening economic recovery should bring credit union loan delinquency rates down to 1.35% by the end of 2012."

Credit unions' loan-to-savings ratio remained at 70%. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained constant at 18%.

The movement's overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $100 billion.


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