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CU Loan Growth Approaching Fastest Pace in Two Decades
Friday, May 27, 2016 6:35 AM

Credit union loan growth is approaching its fastest pace in almost two decades, says Steve Rick, chief economist at the CUNA Mutual Group and author of the monthly Credit Union Trends Report.

According to Rick, credit union seasonally adjusted annualized loan growth reached 12 percent in March, the fastest pace since the first quarter of 2000 when the stock market boom was reaching its apex. The stock market boom soon turned to a bust by the third quarter of 2000, causing consumers to pull back and credit union lending to decline as well. This time around, reports Rick, the credit boom is being driven by strong job growth, rising household formations, and pent-up demand.

The May edition of Credit Union Trends also reports on credit union used-auto loan balances. They grew 2.4 percent in March, better than the 1.1 percent reported in March 2015. On a seasonally-adjusted annualized growth rate basis, used-auto loan balances rose 19.6 percent in March—the fastest pace on record. The last time used-auto loan balances grew this fast was during the dotcom stock market boom of 1999.

Expect auto sales to exceed 17.8 million for all of 2016, 3 percent more than the 17.3 million sales pace set in 2015, due to increasing household formations, the suburbanization of millennials, low gas prices, ample access to credit, low debt burdens, strong job growth, the release of pent-up demand, and growing hourly earnings.

And on the membership front, credit unions should expect membership growth to exceed 3 percent in 2016 and 2017.

Get Your Copy of CUNA Mutual's May Trends Report.