HARRISBURG, Pa. (11/4/13)--Member business loans (MBLs) led loan growth at Pennsylvania credit unions in the second quarter of 2013, according to the Pennsylvania Credit Union Profile for Second Quarter 2013.
MBLs increased 24.4% in the past year, bettering the national growth rate of 8.2%. For the quarter, MBLs rose 7%, compared with 4% in the first quarter of 2013. Pennsylvania's quarterly statistics also exceeded the national growth rate of 2.5%, said the Pennsylvania Credit Union Association (Life is a Highway Nov. 1).
Second quarter lending at credit unions nationwide showed more members were more willing to borrow and less willing to save than a year earlier. Loan balances rose 2.1% in the second quarter, compared with 1.8% for the same period in 2012. Next to MBLs, first mortgage loans grew the fastest at 7%. Used-auto loans were also on the rise at 3.9%.
Credit unions have been urging Congress to lift their MBL cap to 27.5% of assets from 12.25% so credit unions can make more business loans. Lifting the cap would help create 140,000 new jobs and inject $13 billion in small business loans into the economy, without costing taxpayers a dime, said the Credit Union National Association.
The increase in loan balances combined with the simultaneous drop in the dollar amount of delinquent loans, brought down the national credit union loan delinquency rate (delinquent loans to total loans) to 1.04% in the second quarter of 2013 from 1.21% in the second quarter of 2012.
In a report issued this week, the U.S. Small Business Administration (SBA) supported more than $29 billion in lending in fiscal 2013, its third-highest total. The other record highs came in fiscal 2012 ($30.25 billion) and fiscal 2011 ($30.5 billion).
The SBA loans were made through two programs, 7(a) and 504. Credit unions may participate in 7(a) loans. The SBA-guaranteed portion of a 7(a) loan is not counted against a credit union's MBL cap, said the article. Roughly, 347 credit unions had more than 8,100 SBA loans outstanding, totaling $921 million in funds, at the end of 2012.