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Savings up 0.7 loans down 0.4 in March
MADISON, Wis. (5/3/10)--Credit unions’ savings nationwide are robust, while credit unions collective loan growth is still meager, according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly review of credit unions for March. Credit union loans outstanding decreased 0.4% during March, up from a 0.6% decrease during February. Credit union loans in March totaled $578.8 billion, compared with $580.9 billion in March 2009. Fixed-rate mortgages led loan growth, increasing 0.7%, followed by adjustable-rate mortgages and unsecured personal loans, which rose
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0.4% and 0.1%, respectively. On the decline were new-auto loans (-2.1%), other mortgages (-1.8%), and credit card loans and home equity loans (-0.4%). Used-auto loans decreased less than 0.1%. “The recent results show that credit union loan growth remains very weak while savings inflows are strong,” Mike Schenk, CUNA vice president of economics and statistics, told News Now. “Several factors are contributing to the weak loan growth. For one, members appear to be concerned about debt loads and are paying down balances in an effort to adjust to new economic realities. “In addition, credit unions remain concerned about the specter of rising interest rates and are selling substantial portions of fixed- rate first-mortgage originations,” he added. Credit union savings balances increased 0.7% in March, down from a 1.9% increase during February. Credit union savings in March totaled -
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$768.5 billion, compared with $741.2 billion in March 2009. Regular shares grew 2.7%, followed by money market accounts (2%) and individual retirement accounts (1.7%). One-year certificates and share drafts decreased 0.9% and 2.6%, respectively. Credit unions’ 60-plus-day delinquencies decreased slightly to 1.8% in March. “One of the more promising developments seen in the data is that the delinquency rate inched down--the first time that’s happened in more than a year,” Schenk said. “An improving economy and recent labor market growth may mean this is the beginning of a trend--but we'll have to wait to see if this is the case. In any event, the decline seems especially significant because it occurred even though loan balances had declined marginally.” The loan-to-savings ratio remained at 74% in March. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 19%. The movement’s overall capital-to-asset ratio remained at 10% in March. The total dollar amount of capital is $90 billion.
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