Credit Union Trends Report: Inflation rising at fastest rate since 2008

In its May 2021 Credit Union Trends Report, based on data from March, CUNA Mutual Group reported that inflation is currently rising at the fastest pace since 2008. A year ago, the headline consumer price index, or CPI, rose 4.2%, while the core CPI (excluding food and energy prices) rose 3%.

Used car prices and airfares were up more than 10% in April versus March, contributing to the headline CPI rising 0.8% for the month, and excluding food and energy prices, the core CPI jumped 0.9% — the fastest monthly pace since the early 1990s, according to the report

In addition, the average credit union member had $13,562 in total savings deposits in March 2021, up from $11,307 in March 2020. The credit union average capital-to-asset ratio fell to 9.8% in March 2021, down from 11% in March of 2020, while credit union new-auto loan balances declined 3.2% in March, a bigger decline compared to the 0.8% drop in March 2020, according to the report. 

The report also found that:

  • credit union loan balances rose 0.22% in March, below the 0.33% reported in March 2020 and 4.9% during the last 12 months;
  • driving overall loan growth was strong growth in unsecured personal loans (2.6%), used-auto loans (0.7%) and fixed-rate first mortgages (0.6%);
  • credit union loan growth is currently around 5%, below its long run average of 7%;
  • new auto loan balances are down 6.5% from one year ago, but used-auto loan balances are up 4.8%;
  • vehicle sales were 17.7 million in March and 18.5 million in April at a seasonally adjusted annualized sales rate; the April sales number is the strongest April in the history of the U.S. auto market and the fastest of any month since July 2005;
  • the contract interest rate on a 30-year fixed-rate conventional home mortgage rose to 3.08% in March, up from the 2.81% in February but lower than the 3.45% reported in March 2020;
  • home prices rose 2% in March from February, and 11.3% year-over-year which is the fastest pace since 2006;
  • credit union surplus funds as a percent of assets rose to 35.7% in March from 27% last year, as credit unions placed strong deposit growth into investments as loan growth slowed;
  • the average credit union member has 20% more savings balances today than they did one year ago;
  • the credit union average capital-to asset ratio fell to 9.8% in March 2021, down from 11% in March of 2020; and
  • credit union membership growth slowed slightly in the first quarter of 2021, adding 0.965 million new memberships, slightly slower than the 0.993 million added in the first quarter of 2020.

The Credit Union Trends Report is a monthly “pulse check” on the state of the credit union marketplace, often placed in a historical context. The report includes data from two months prior and is published and distributed by Steven Rick, chief economist for CUNA Mutual Group. The Trends Report is intended to provide a review and analysis of recent credit union financial performance and operational results in the context of recent economic activity. Data and analysis are provided to establish standards against which credit unions’ own performance can be compared.

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