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CUs Poised to Maintain Strong Growth in 2016
Friday, February 5, 2016 6:40 AM

According to the 2016 CUNA Economic and CU Forecast, credit union loan balances will climb 9 percent this year, while membership growth will jump 3 percent, and savings balances will jump 6 percent after rising 6.2 percent in 2015.

“Loan growth this year will be marginally lower than the impressive loan growth of last year,” said Perc Pineda, CUNA senior economist. In 2015, loan growth accelerated at its fastest pace in a decade. “As the economy continues to expand, we expect households to continue to release pent-up demand for autos, furniture and appliances over the next year, but at a slightly lower pace. New-auto loans, credit card loans and purchase-mortgage loans will remain strong growth areas.”

“Since interest rates have been rising more slowly than expected from the Federal Reserve’s action in December, the anticipated transfer of funds to money market mutual funds did not materialize [in 2015],” Pineda said. “Members are saving more, helped by their gasoline windfall, rather than spending. We expect members to be cautiously optimistic in 2016 in light of the recent stock market turmoil.”

Additional 2016 forecasts from CUNA:

  • Credit quality will remain strong at 0.8 percent;
  • Net charge offs will fall to 0.45 percent from 0.49 percent;
  • Credit union returns on assets will fall to 0.7 percent, as “mortgage refinancing and its resulting revenue will decline in 2016;” and
  • Net-worth ratios will climb 11 percent after jumping 11.1 percent in 2015. “Lower loan growth, higher savings growth, and marginally lower earnings in 2016 will cause net-worth ratios to be lower than in 2015.”