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CU System
March CU loans fixed-rate mortgages increase
MADISON, Wis. (5/6/08)--Not only did credit unions' loans outstanding increase during Marcy, but also fixed-rate mortgages increased 2.8%, for the largest monthly increase since June 1999, according to the Credit Union National Association (CUNA) monthly sample of credit unions.
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Credit union loans outstanding increased 0.6% in March, rising 0.8% for the first quarter of 2008. “Credit unions are picking up loan market share, as competitors tighten their underwriting standards in the wake of the subprime mortgage crisis,” said Steve Rick, CUNA senior economist. Declining during March were home equity loans (2.8%), new-auto loans (1.5%), and unsecured loans (1.1%). “Consumers are pulling back on auto purchases and auto loans,” Rick said. “Credit union new-auto loan balances declined 3.4%, the biggest drop in 10 years.” Credit union savings balances grew 1.2% in March, compared with 2.5% a year ago. Savings growth for the first quarter of 2008 was 5%, compared with 4% for the same period last year.
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“Credit union savings balances rose 5% in the first quarter, the fastest pace in five years, as the falling home process eviscerates household wealth, creating an incentive for credit union members to increase their savings,” Rick explained. Individual retirement accounts, money market accounts and regular shares rose 4.7%, 3.8%, and 1.7%, respectively. Share drafts declined 3.3% during March. The largest year-to-date growth by account type was in the money markets accounts--rising 8%. Credit unions’ loan-to-savings ratio decreased to 80.1% in March from 80.6% in February. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 21%. Regarding asset quality, credit union 60-plus day delinquencies were 0.97% in March, a slight decrease from 0.98% in February 2008. “Delinquency rates have leveled off below the 1% level, highlighting the fact that the credit crisis has not adversely affected credit unions to the same degree as many other lenders,” Rick said. With the increase in assets, the movement’s overall capital-to-asset ratio remains at 11.1%. The total dollar amount of capital ended the year at $90 billion, an increase of 0.8% from February.
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