Credit union lending and membership growth remained strong in June, according to CUNA’s monthly credit union estimates.
Credit union loans outstanding grew 1.1% in June, buoyed by a strong auto lending market.
Credit unions memberships rose 0.4% in June, the same rate as May. Total credit union membership now stands at 107.2 million.
New-auto loans led loan growth, rising 1.8%, followed by unsecured personal loans (1.6%) and used-auto loans (1.5%). Fixed-rate mortgages rose 1.2%, credit card balances increased 0.8%, while home equity loans were up 0.7%. Adjustable-rate mortgages nudged up 0.1%.
“We are passed the seasonality of usually weaker auto sales in the first quarter relative to the other quarters in a year,” said CUNA Senior Economist Perc Pineda.
Credit union savings balances increased 0.6% in June, compared with a 0.5% decline in May. Share drafts led savings growth, surging 0.8%, followed by money market accounts, 1-year certificates, and regular shares (all rising 0.5%), and individual retirement accounts (0.2%).
“Year to date, both savings and loan growth have increased 4.5%,” said Pineda. Assets, year to date, are up 3.7%, and asset quality at credit remains healthy.”
The loan-to-savings ratio increased to 77.7% from 77.3% in May in June. The liquidity ratio--the ratio of surplus funds maturing in less than 1 year to borrowings plus other liabilities--decreased to 15.5% in June from 16.3% in May.
“Regarding the overall economy, personal income has been increasing for the past 4 months to 0.2% in June,” Pineda said. “And the increase in credit card loans is also consistent with personal consumption expenditures that went up 4.2% in the second quarter. In fact, durable goods consumption, which is mostly financed by credit, rose 8.4% in the second quarter.”
Business investment spending has been falling for the past 3 quarters--down 9.7% in the second quarter, Pineda noted. “What our economy could use is optimism from the business sector in the form of higher investment spending to keep the economy growing above its current growth level,” he said.