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Auto Lending Gains Set the Pace for Oklahoma Credit Unions in 2013
Monday, February 24, 2014 6:50 AM

Oklahoma credit unions finished 2013 on a strong note, benefitting from continued improvements in both economic and labor market conditions. In a sign that Oklahoma’s economy continues to perform at a high level, credit union loan growth in the state outpaced savings growth by a wide margin in 2013.

Overall, credit union loan portfolios grew by 2.0 percent (8.0 percent annualized) in the final three months of the year and by 12.6 percent in the 12 months ending December 2013.  In contrast, savings balances increased by 0.6 percent (2.4 percent annualized) in the fourth quarter and by 5.2 percent in the year. 

The 12.6 percent full-year loan portfolio increase was the largest percentage gain Oklahoma credit unions experienced in two decades and the 2013 tally also represented the second consecutive year that annual credit union loan growth exceeded savings growth in the state.  In contrast, loan growth rates lagged savings growth each year throughout the 2008 to 2011 period.  

Automobile lending continued to drive overall loan growth results in 2013 as improving labor markets and pent-up demand pulled more consumers into dealer showrooms.  The surge in borrowing activity in Oklahoma was reflected in a 19.7 percent full-year jump in used auto loans and a nearly identical – 19.1 percent increase in new vehicle loans. 

Importantly, strong 2013 lending results were not limited to the auto arena – gains were broad-based with increases evident in nearly every key loan category: Oklahoma credit union personal unsecured loan balances increased by 19.1 percent in the year, while credit card balances increased 5.1 percent.     

Improving labor markets and a healthy housing market rebound both helped consumer finances and put more Oklahomans in the mood to borrow.  For example:

  • Oklahoma’s economy added 18,800 jobs in 2013 and the unemployment rate finished the year at 5.4 percent (well below the current 6.6 percent national unemployment rate according to the Bureau of Labor Statistics.)
  • Oklahoma home prices continue to firm, with 4.1 percent increase in the year ending September 2013 (the most recent data available).  This result was higher than the 2.7 percent full-year 2012 increase according to the Federal Housing Finance Agency’s purchase-only index.  The FHFA data shows Oklahoma home prices now are 5.3% higher than pre-recession levels.

As shown in the following chart, Oklahoma credit unions continue to offer substantial financing advantages on a variety of consumer loans.

Oklahoma Consumer Loan Interest Rate Averages

February 19th 2014 – Source: Informa Research Services

Product

OK Credit Unions

OK Banks

CU-Bank Difference

Credit Card Platinum

9.12%

10.93%

-1.81%

Home Equity Loan -70%LTV $25,000/5 Yr.

 

4.51%

 

6.02%

 

-1.51%

Unsecured personal $5,000/3 Yr.

9.41%

9.45%

-0.04%

New Vehicle – 5 Yr.

2.76%

3.58%

-0.82%

Used Vehicle – 4 Yr.

2.73%

3.93%

-1.20%

 

The current average rate on a 5-year new auto loan at the state’s credit unions now averages 0.82 percentage points lower than the comparable rate at the state’s banking institutions.  On a five-year, $30,000 new car loan the credit union advantage saves the average Oklahoma consumer over $130 per year – or nearly $660 over the life of the loan.

Oklahoma consumers are increasingly recognizing these and other significant benefits of credit union membership.  Indeed, total memberships in the state’s credit unions grew by 4.9 percent in 2013 – that’s the fastest increase in over twenty years and over four times higher than the 0.91 percent rate of state population growth in the period according to the US Census Bureau.

 

[Source: The information in this report is based on a sample of large Oklahoma credit union operating results. This quarter’s report is based on results of 42 percent of all Oklahoma credit unions that collectively serve 90 percent of the members and manage 94 percent of the assets in credit unions throughout the state.]