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CU loans outpace savings for first time since '07: CUNA
MADISON, Wis. (2/5/14)--Credit union lending outpaced savings in 2013, the first time that has happened since 2007, according the Credit Union National Association, which Tuesday released its monthly sample of estimates for December. Credit unions reported loan balances rose 6.8% last year, up from the 4.8% in 2012.
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"Credit union members were in a car-buying mood with new auto loans and used auto loans up 10.9% and 8.9%, respectively," said Steve Rick, CUNA senior economist.
Savings growth decelerated to 4.3% in 2013 from 6.1% one year earlier. Credit union savings balances declined 0.1% in December compared with a 0.9% increase in November. One-year certificates (1.1%) and money market accounts (0.6%) increased during December. Share drafts, regular shares and individual retirement accounts declined 5.3%, 0.1%, and 0.04%, respectively.  
Credit union loan balances are expected to rise 7% in 2014, Rick said. "Expect households to release pent-up demand for autos, furniture and appliances over the next two years," he added.
With loans growing faster than savings, the loan-to-share ratio rose to 70.3% in December 2013, from 68.6% in December 2012.  This helped increase the yield on asset ratio in the second half of the year, reversing its six-year slide.
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"On the savings side of the balance sheet, members continue to look for safe, short-term liquid deposit accounts," Rick said. Regular share balances rose 8.6%, followed by money market accounts up by 3.9% and share draft accounts up 5.9%.
Credit union savings balances are expected to grow 4% in 2014. The savings rate will remain below the 6.7% average of the last 20 years as the economic recovery encourages household to spend rather than save.
Credit union membership rose by 2.9% in 2013 to reach 98.87 million. "We should see credit union memberships climb above the 100 million mark sometime in May or June 2014," Rick said.
 Asset quality remains strong as shown by the 60-day-plus delinquency rate has remained at 1% for the past 10 months.
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