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CU Membership and Loan Growth Slows in September
Thursday, November 8, 2018 6:30 AM

According to CUNA’s Monthly Credit Union Estimates, total credit union membership grew 0.26 percent in September to 117.9 million, while loan growth rates for the month were at 0.69 percent. Both rates represent a decline from August.

“Credit union membership and loan growth tend to be slower in the month of September,” said CUNA Senior Economist Samira Salem. “Still, year-over-year rates are 4.4 percent for membership growth and 9.8 percent for loan growth. The latest CUNA 2018 forecast puts membership and loan growth at still healthy yet slightly lower rates of 4.1 percent and 9.5 percent, respectively.”

In late September, the Federal Open Market Committee raised interest rates for the third time this year. Credit union loan and deposit rates, which have been steadily increasing over the past year, increased across all ten major categories of interest rates that CUNA tracks in September.

Credit union loans outstanding grew 0.7 percent in September 2018, compared to a 1.0 percent increase in August. Unsecured personal loans led loan growth, rising 1.2 percent, followed by fixed-rate mortgages (0.84 percent), new auto loans (0.81 percent), used auto loans (0.77 percent), adjustable-rate mortgages and home equity loans (both rising 0.4 percent), and credit card loans (0.2 percent). On the decline during the month were other mortgage loans (-0.2 percent),

Credit union savings balances declined -0.4 percent in September, compared to a 1.4 percent increase in August. One-year certificates led savings growth during the month, rising 0.8 percent, followed by individual retirement accounts (0.1 percent).

On the decline during the month were share drafts (-2.9 percent), money market accounts (-0.4 percent), and regular shares (-0.3 percent).

“These declines drove credit unions’ weak savings performance this month. Growth in certificate of deposits (CDs) of 0.79 percent and growth in IRAs of 0.14 percent moderated the overall savings decline,” Salem said. “The growth in CDs and IRAs were buoyed by relatively large increases in deposit rates over the last year.”

Credit unions’ 60+ day delinquency remained at 0.7 percent during September.

“Since the beginning of the year, delinquency rates have been on a steady decline," Salem said. "They’ve declined to 0.65 percent in September from 0.81 percent in January. An improved labor market characterized by historically low unemployment rates, consistently strong job growth, and increasing real wages is likely contributing to the improved credit quality and strong loan growth at credit unions.”

The loan-to-savings ratio increased from 84.5 percent in August to 85.5 percent in September. The liquidity ratio (the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities) declined from 13.4 percent in August to 12.6 percent in September.

The movement’s overall capital-to-asset ratio declined from 10.7 percent in August to 10.6 percent in September. The total dollar amount of capital increased 0.5 percent to $158.2 billion.

Source: CUNA