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NCUA: CU Expansion Continued during First Quarter
Wednesday, June 4, 2014 6:35 AM

America’s credit union system continued to grow during the first quarter of 2014, although higher interest rates during the first quarter that slowed mortgage originations and ongoing growth in long-term investments are still concerns, the National Credit Union Administration (NCUA) reported yesterday.

“The continued growth in credit union lending and gains in membership during the first quarter are positive signs,” NCUA Board Chairman Debbie Matz said. “Investing in people and communities will produce dividends for credit unions in many respects, but the higher interest rate environment of late 2013 and the first quarter of 2014 slowed mortgage originations. To protect the Share Insurance Fund, NCUA continues to closely monitor the risks posed by rising interest rates, long-term investments and fixed-rate mortgages.”

NCUA released the new figures based on Call Report data submitted to and compiled by the agency for the quarter ending March 31, 2014.

In the first quarter of 2014, outstanding loan balances were up 8.8 percent from the first quarter of 2013 to $652.7 billion. Year-over-year:

  • New auto loans grew 13.9 percent to $73.5 billion.
  • Used auto loans increased 11.3 percent to $130.1 billion.
  • Net member business loan balances rose 11.1 percent to $47.3 billion.
  • Non-federally guaranteed student loans went up 26.5 percent to $2.8 billion.
  • Short-term small loan originations, a consumer-friendly alternative to predatory payday loans, totaled $92.1 million at an annualized rate, up 34.8 percent from the first quarter of 2013.

First mortgage real estate loans reached $272.6 billion, up 9.7 percent from the first quarter of 2013. Slightly more than 61 percent of first mortgage loans in the latest reports had fixed rates.

Credit unions continued to add long-term investments to their portfolios despite a year-over-year overall decline in investments. Federally insured credit unions’ investments totaled $291 billion at the end of the first quarter, a decline of $1.7 billion, or 0.6 percent, from the first quarter of 2013.

While the number of federally insured credit unions fell to 6,491 at the end of the first quarter (262 fewer than at the end of the first quarter of 2013, a decline of 3.9 percent), membership in federally insured credit unions grew by 831,635 in the first quarter of 2014, reaching a new high of 97.1 million.

The decline in number of credit unions is consistent with the trend of the last 40 years as the consolidation of federally insured credit unions continues.

The aggregate net worth ratio was 10.61 percent at the end of the first quarter, 16 basis points below the ratio in the previous quarter, but 31 basis points higher than the end of the first quarter of 2013.

Click here to read more.