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CUs Post Double-Digit Loan Growth in 2015
Wednesday, February 3, 2016 6:45 AM

For the second straight year, credit unions notched a 10.2 percent increase in loan growth in 2015, putting total loans outstanding at the $800 billion benchmark, according to the Credit Union National Association’s December credit union monthly estimates. Aside from last year’s performance, it’s the fastest pace of growth since 2005.

New and used auto loan growth rose 16.5 percent and 12.8 percent respectively, while fixed-rate first mortgages climbed 7.8 percent, adjustable-rate mortgages jumped 12.3 percent, and home-equity lines of credit increased 8.7 percent.

“The December estimates show that our 2015 forecast for loan growth at 10.2 percent was on target,” said Perc Pineda, CUNA senior economist. “Additionally, on a 12-month basis, savings growth rose 6.8 percent, which is higher than our revised forecast of 6.2 percent.”

Memberships posted the strongest rate of growth last year since 1988, when memberships jumped 3.9 percent. In 2015, memberships increased 3.7 percent to 105.2 million nationwide.

In December, credit union loans outstanding climbed 0.9 percent, led by adjustable-rate mortgages at 3.2 percent, credit card loans at 2.2 percent, and new-auto loans at 1.7 percent. Fixed-rate first mortgages and home-equity loans declined 0.5 percent and 0.3 percent respectively.

Looking forward, Pineda said that CUNA economists forecast a 9 percent increase in credit union loan growth in 2016.

We expect the U.S. economy to grow 2.75 percent in 2016,” Pineda said. “The labor market continues to improve, and this should keep the delinquency rate at its currently low level of 0.8 percent.”

Housing and auto demand are expected to be robust in 2016, which bodes well for continued economic expansion and strong paces of loan and savings growth for credit unions, Pineda added.

Additional numbers from the report:

  • Savings balances climbed 6.8 percent on the year and 1.1 percent in December to $1.04 trillion; and
  • The movement’s overall capital-to-asset ratio declined to 10.7 percent from 10.8 percent in December, with the total dollar amount of capital in the credit union movement coming in at $131.6 billion.