Lending and membership growth highlighted June’s Monthly Credit Union Estimates, continuing this year’s trend of strong results.
"CUNA’s June Monthly Credit Union Estimates report is indicative of a relatively strong and growing economy, which is benefiting credit unions and their members," said Jordan van Rijn, CUNA senior economist. "Low unemployment, moderate and sustained GDP growth, and increasing home values have caused continued loan and membership growth, and contributed to low delinquency rates."
Credit unions added more than 500,000 new members in June, the highest monthly increase in nearly 2 years, and the largest June increase since 2003. Memberships are now on pace for an annual increase of over 4.5%, outpacing our 2017 forecast of 4.0%.
“With the U.S. population growing at just 0.7%, credit unions are growing over 6 times faster than the general population, emphasizing that more and more people are recognizing the value of credit unions,” van Rijn said.
Loans outstanding increased 1% in June. Fixed-rate mortgages led loan growth, rising 2.6%, followed by home-equity loans at 1.6%, new auto loans at 1.1%, and unsecured personal loans and other mortgage loans, which both increased 0.7%. Credit card loans were up 0.4%, while used-auto loans increased 0.3%.
Through June, year-to-date loan growth is at 4.86%, the highest mid-year growth rate since 2005,” van Rijn said. “Loan growth continues to be driven by auto financing, which has increased 6.65% so far in 2017. This is slightly below last year’s mid-year rate of 6.94%, but still a very good clip.
“As home values rise and equity increases, people are feeling wealthier, and this has led to significant demand for home-equity lines of credit (HELOCs) and second mortgages. Year-to-date growth in HELOCs and second mortgages was 4.4% in June, over 3 1/2 times higher than at the same time last year, and the fastest mid-year growth in these loan categories since 2006.”
Saving balances declined 1.4% in June, compared with a 0.2% decline in May. Share drafts led savings growth, rising 2.8%, followed by regular shares (2.2%), and one-year certificates (1.1%).
Credit unions' 60-plus delinquency remained at 0.7% in June.