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Auto Lending Gains Set the Pace for Texas Credit Unions in 2013
Tuesday, February 25, 2014 6:45 AM

Texas credit unions finished 2013 on a strong note, benefitting from continued improvements in both economic and labor market conditions.

In a sign that Texas’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 2.9 percent (11.6 percent annualized) in the final three months of the year and by 9.4 percent in the 12 months ending December 2013. In contrast, savings balances increased by 0.5 percent (2.0 percent annualized) in the fourth quarter and by 4.7 percent in the year. 

The 9.4 percent full-year loan portfolio increase was the largest percentage gain Texas credit unions experienced in a decade 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 2007 to 2011 period.  

First mortgage and automobile lending continued to drive overall loan growth results in 2013 as improving labor markets and pent-up demand pulled more consumers into big-ticket purchases.  The surge in borrowing activity in Texas was reflected in a 12.8% full-year jump in first mortgage loans and a 10.3 percent increase in used vehicle loans. 

Importantly, strong 2013 lending results were not limited to the mortgage and used auto arenas – gains were broad-based with increases evident in nearly every key loan category: Texas credit union personal unsecured loan balances increased by 11.7 percent in the year, while new vehicle loans and credit card balances increased 8.2 percent and 6.0 percent respectively.  Business loans increased 2.6 percent in the year.     

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

  • Texas’s economy added 252,000 jobs in 2013, which helped to push the state’s unemployment rate down 0.2 percentage points – to 6.0 percent at year-end 2013.  That’s the lowest Texas unemployment rate reported in five years (i.e., since December, 2008) according to the Bureau of Labor Statistics. 
  • Texas home prices continue to firm, with 7.1 percent increase in the year ending September 2013 (the most recent data available). This result was marginally higher than the 7.0 percent full-year 2012 increase according to the Federal Housing Finance Agency’s purchase-only index.  The FHFA data shows Texas home prices now are 11.2 percent higher than pre-recession levels.
  • Household balance sheets continue to improve, reflected in a continued steep decline in credit union borrower-bankruptcy filings.  In all, filings fell by 13.3 percent in the year ended December 2013.

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

Texas Consumer Loan Interest Rate Averages

February 10th 2014 – Source: Informa Research Services


TX Credit Unions

TX Banks

CU-Bank Difference

Credit Card Platinum




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







Unsecured personal $5,000/3 Yr.




New Vehicle – 5 Yr.




Used Vehicle – 4 Yr.





The current average rate on a 5-year new auto loan at the state’s credit unions now averages 1.25 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 Texas consumer over $200 per year – or $1,000 over the life of the loan.

Texas consumers are increasingly recognizing these and other significant benefits of credit union membership.  Indeed, total memberships in the state’s credit unions grew by 3.57 percent in 2013 – that’s over double the 1.49 percent rate of state population growth in the period according to the US Census Bureau.

[The information in this report is based on a sample of large Texas credit union operating results.  This quarter’s report is based on results of 35 percent of all Texas credit unions that collectively serve 90 percent of the members and manage 94 percent of the assets in credit unions throughout the state.]