Continued lending strength as consumers prepared for the holidays highlighted November’s monthly credit union estimates.
Credit union loans outstanding grew 0.9% in November 2017, matching the result for October 2017. Fixed-rate first mortgages led loan growth during the month, rising 1.7%, followed by unsecured personal loans (1.6%), credit card loans (1.4%), new auto loans (1.2%), home equity loans and used auto loans (both rising 1.0%), and other mortgage loans (0.5%). On the decline during the month were adjustable-rate mortgages (-2.5%).
"Total unsecured loans jumped 1.49% in November, the largest monthly increase since last December, and the largest increase in November since the recession,” said Jordan van Rijn, CUNA senior economist. “Spikes in unsecured debt are typical for this time of year, as consumers prepare for the holidays. However, the particularly significant increase indicates that consumers are relatively confident and feel good about taking on more consumer debt.”
Adjustable mortgages fell 2.5% in November, the largest monthly decline in seven years. “Since February, originations of adjustable mortgages have basically stayed flat, increasing only 0.70% over the 10-month period---well below the 6.2% gain over the same period in 2016,” van Rijn said. “This may indicate that some of the pent-up demand for mortgages is dwindling, and that most of the demand is from qualified members looking for low long-term rates with fixed mortgages. Indeed, fixed mortgages are up a very strong 10.68% through November.”
Credit union savings balances grew 0.5% in November, compared with a 0.4% decline in October. Share drafts led savings growth during the month, rising 3.5%, followed by one-year certificates of deposits (CDs) at 1.5%. “CDs are now up 7.21% for the year and are on track for the largest annual increase since 2007,” van Rijn said. “This may indicate that members are beginning to recognize and respond to rising interest rates, and shifting deposits towards savings accounts with higher returns.”
Total credit union memberships grew 0.4% during November to 113.5 million.
The loan-to-savings ratio increased to 83.1% in November from 82.8% in October. The liquidity ratio (the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities) decreased to 13.8% in November from 13.9% in October.
The movement’s overall capital-to-asset ratio remained at 10.7% in November. The total dollar amount of capital increased 0.3% to $149.7 billion.