CUNA Mutual Group Trends Report: CU loan balances see ‘remarkable’ growth

On By nycuaIn NY Minute, Strategic Partners

In its July 2022 Credit Union Trends Report based on data from May, CUNA Mutual Group reported that credit union loan balances rose a “remarkable” 14.6% during the past year, the fastest annual pace since May 1995.

Credit union balances rose 2.3% in May, faster than the 0.8% pace reported in May 2021, due to consumers taking advantage of still relatively low interest rates, while every loan category reported strong growth rates in May, with unsecured personal loans leading the way reporting 3% monthly growth, according to the report.

The report also stated that credit union memberships grew by 4.17 million during the year ending in May 2022 and that memberships should exceed 135 million by the 4th quarter of 2022. 

Other highlights from the report:

  • for the second consecutive quarter, the U.S. economy produced fewer goods and services as measured by GDP than the quarter before at a seasonally adjusted annual rate;
  • compared to the second quarter of 2021, real GDP rose 1.6%, only slightly below the 2% long-run trend growth rate;
  • credit union consumer installment credit balances reported an increase of 1.9% in May, similar to the 2.2% increase set in May 2021, due to an acceleration in auto and credit card loans;
  • rising interest rates threaten to curb demand for credit over the next few months. But demand for travel and new autos should keep consumer installment credit growth strong through the remainder of 2022;
  • credit union new-auto loan balances rose 2.8% in May, a big increase compared to the 1% gain reported in May 2021, while on a seasonally adjusted annual rate, new auto loan balances rose 28.3% in May, the fastest pace in over 25 years;
  • credit union fixed-rate first mortgage loan balances rose 1.9% in May, above the 1% increase reported in May 2021 and credit union fixed-rate first mortgage loan balances rose 21.6% at a seasonally adjusted annual rate in May, the fastest pace since 2001;
  • credit union return-on-asset ratios declined 19 basis points over the last year to 0.85%.
  • credit union savings balances grew at a 5.8% seasonally adjusted, annualized growth rate in May, significantly below the 13.4% pace set in May 2021; and
  • credit union loan delinquency rate fell to 0.42% in May, down from 0.43% in April and from 0.47% in May 2021.

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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