Home loans from credit unions continued to grow strongly in July compared to July 2019 before the pandemic. Even auto loans have increased, according to CUNA’s latest monthly estimate.
However, the Fed’s G-19 consumer credit report released on Tuesday showed the movement’s loan balances on credit cards fell 5.9% to $ 60.7 billion as of July 31.
Credit unions had increased credit card loans at a rate of 6% to 8% last year compared to the same months in 2018. After COVID-19 was declared a pandemic on March 11, consumers suspended their expenses.
Credit card spending turned negative in April and declined by larger percentages each month, even as other major segments improved.
The Madison, Wisconsin Commercial Group Monthly estimates from credit unions released last week found that the country’s 5,365 credit unions had $ 1.17 trillion in loans as of July 31, up 6.5 percent from July 2019 – at about the same rate of growth of July 2018 to July 2019.
Loans per member rose 3.5% to $ 9.37 trillion as of July 31. A year earlier, they had risen 2.5%.
Total auto loans rose 1.6% to $ 383.4 billion as of July 31. A year earlier, the balance increased 4.6%. Real estate is doing even better than in 2019, with total lending increasing 10.4% to $ 598.5 billion in July. A year earlier, they had increased by 7.1%.
However, savings continue to grow much faster, indicating that consumers remain cautious. In July, savings rose 18.9% to $ 1.54 trillion. From July 2018 to July 2019, it increased by 6.8%. Per member savings increased 15.6% to $ 12.39 trillion as of July 31. A year earlier, they had increased by 3%.
As savings increased, assets rose 17.3% to $ 1.81 trillion as of July 31. A year earlier, assets increased 6.7%. Capital increased 8.4% to reach $ 186.8 billion as of July 31. A year earlier, it had increased by 10.5%.
Mike Schenk, vice president of economics and statistics at CUNA, said assets have been supported by strong stimulus from the government, while capital has eroded with falling net income. As a result, the capital / asset ratio deteriorated. It was 10.3% in July, against 10.5% in June and 11.2% in July 2019.
Nonetheless, Schenk said credit unions have built up strong balances over good years, giving them the ability to support their members in these difficult times.
“Credit unions are in excellent financial shape. We entered the recession with near record levels of capital, ”and low levels of defaults and write-offs, he said.
The CUNA report showed that credit unions had 124.7 million members as of July 31, a gain of 2.9 percent. A year earlier, the number of members had increased by 3.8%. The report also estimated:
- New auto loans fell 2.9% to $ 145 billion.
- Used auto loans increased 4.5% to $ 238.5 billion.
- Other unsecured consumer loans (excluding auto loans and credit cards) increased 2.5% to $ 46.9 billion. A year earlier, they had increased by 8.9%.
- Fixed rate first mortgages increased 15.8% to $ 379.9 billion.
- First variable rate mortgages increased 8.5% to $ 130.9 billion.
- Second mortgages fell 10.1% to $ 31.6 billion.
- Home equity lines of credit fell 3.5% to $ 56.1 billion.
