Go to:

July 2018
< Jun Aug >
Leaguer Email Subscription

You are not currently subscribed. Click Subscribe below to receive the Leaguer email.

CUNA Economists Forecast Double-Digit Loan Growth in 2017
Friday, January 20, 2017 6:50 AM

Credit unions could see a double-digit increase in lending growth this year, based on the CUNA Economic and Credit Union Forecast.

“We expect loan growth to stay upbeat, rising 10 percent this year,” said Perc Pineda, CUNA senior economist. “As labor markets continue to strengthen, household consumption will stay strong. While auto lending could be marginally weaker than last year, technological enhancement in new vehicles will continue to generate healthy auto demand. The housing market is still in recovery mode, but housing demand remains strong. Both factors will continue to support healthy auto and mortgage lending at credit unions in 2017.”

The overall U.S. economy grew by 2 percent in 2016 and will continue to expand by 2.5 percent in 2017, CUNA economists said.

“A strong driver of economic growth in 2017 will be the turnaround in business investment spending,” Pineda said. “If government spending in infrastructure materializes, it will contribute to economic growth in the long run. Both higher business investment spending and government spending will push the unemployment rate lower. However, the global economic climate will continue to influence the rate of U.S. economic growth.”

CUNA economists expect the Federal Open Market Committee (FOMC) to raise the federal funds interest rate 3 times this year to 1.4 percent by year-end. Rising output, tighter labor markets, and higher inflation in 2017 will cause the FOMC to continue monetary policy normalization.

“We expect the 10-year Treasury yield to top 3 percent by December,” Pineda said.

Memberships will increase in 2017 by 3.5 percent due primarily to recognition of the positive credit union value proposition. Membership growth in 2017 will be marginally lower than 2016 as the auto lending boom begins to slow and indirect borrower memberships decline. 

Read more at CUNA News Now.