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CUNA Mutual Group Trends Report: Continued Slow Loan Growth in 2019
Wednesday, December 5, 2018 6:40 AM

Credit union loan portfolios are growing more slowly this year, a trend that is likely to continue next year, according to a CUNA Mutual Group report released Friday.

Steven Rick, CUNA Mutual Group’s chief economist, said the combination of slower U.S. economic growth and rising consumer debt is likely to slow credit unions’ total loan growth to 8 percent in 2019. The Credit Union Trends Report shows total loans growing 9.8 percent to nearly $1.1 trillion in the 12 months that ended Sept. 30.

Highlights from the November 2018 Trends Report:

  • Credit union loan balances rose 0.7 percent in September, faster than the 0.6 percent pace reported in September 2018. "Driving overall loan growth was strong growth in unsecure personal loans (1.2 percent), fixed-rate first mortgages (0.8 percent) and new-auto loans (0.8 percent)," the report said.
  • The credit union average loan-to-savings ratio reached 85.5 percent in September, up from 81.8 percent in September 2018, and the highest since May 1980. "Loan-to-savings ratios peak right before recessions and may contribute to the economic slowdown that follows due to tight liquidity from credit unions reducing their pace of lending and high levels of members’ debt reducing their demand for loans," the report said.
  • The loan delinquency rate (loans two or more months delinquent as a percent of total loans outstanding) fell to 0.65 percent in September, down from 0.78 percent in September 2018, as the unemployment rate falls below what economists now believe is the “full employment rate” of 4.7 percent.

Download the report.