News Now

Recession slowing growth of CU lending

MADISON, Wis. (7/30/09)--The ongoing recession is taking its toll on credit union lending, according to a Credit Union National Association (CUNA) economist's analysis of CUNA's monthly sample of credit unions for June.

"For the first six months of the year, credit union loan balances rose 0.7%, significantly lower than the 3.1% reported for the same period last year," Steve Rick, CUNA senior economist told News Now. "Americans are deleveraging their balance sheets by paying down debt or slowing their debt accumulation.

Click to view larger image Click for larger view

"Credit unions should expect the loan portfolio to rise 5% this year, below the past five-year average of 8.4%," he added.

Credit union loans outstanding, which totaled $584.5 billion, increased 0.2% during June. It also increased 0.7% during the first six months of 2009, down from a 3% increase during the same period of 2008. Fixed-rate mortgages led June loan growth, rising 1.5%, followed by credit card loans (1.4%), unsecured personal loans (0.9%), used-auto loans (0.7%), and home equity loans (0.2%).

However, during this period, new-auto loans declined (-0.3%), as did other mortgages (-0.6%), other loans (-0.9%) and adjustable-rate mortgages (-1.6%).

Click to view larger image Click for larger view

Credit union savings balances totaled $754.5 billion for June, declining 0.2%, but grew 8.2% during the first six months of 2009. During this period, money-market accounts led savings growth with a 1.5% increase, followed by regular shares, which increased 1.1%.

Also during this period, one-year certificates essentially remained constant--increasing less than 0.05%--while individual retirement accounts and share drafts declined 1.1% and 5.6% respectively.

"With fears of job losses on the minds of many Americans, the U.S. savings rate rose to 6.9% recently," Rick said. "Credit union savings balances have responded with an 8.2% rise in the first half, up from 6.4% last year."

Regarding asset quality, credit union 60-plus-day delinquencies declined to 1.5% in June from 1.7% in May.

The loan-to-savings ratio decreased slightly to 77.5% in June. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities-- remained constant at 20%.

The movement's overall capital-to-asset ratio increased to 9.8% in June 2009. The total dollar amount of capital is $88 billion.

print this story email this story
Resource Links
Monthly CU Data
Daily Financial Rates


More CU/System