MADISON, Wis. (6/4/15)--A double dose of discouraging economic data last week--that the economy contracted in the first quarter and consumer sentiment moving forward had diminished--did not undercut a strong month of lending for credit unions in April.
CUNA’s monthly credit union estimates, released this week, found that loan growth at credit unions climbed 1% in April after a 0.6% jump in March.
“The uneven macroeconomic data in the first quarter seemed to have no effect on credit union lending,” said Perc Pineda, CUNA senior economist. “The Bureau of Economic Analysis revised its estimate of the first quarter GDP growth rate from an increase of 0.2% to a decrease of 0.7%. Despite weak first quarter GDP numbers, credit union lending continued to expand.”
The expansion was fueled by home-equity loans, which rose by 3.5%, followed by adjustable-rate mortgages at 2.1%, new-auto loans at 1.9%, unsecured personal loans at 1.6% and used-auto loans at 1.1%.
Fixed-rate first mortgages fell by 0.5%, however.
Still, loan growth jumped 10.75% on a year-over-year basis in April, on track to reach CUNA’s forecast of 11% loan growth for 2015.
“Mortgage loan data point to a housing market that is picking up steam as the unemployment rate continues to fall,” Pineda said. “Housing starts, building permits and new-home sales rose 20.2%, 9.8% and 6.8%, respectively in April, signaling a brisk pace for the housing market ahead.”
Memberships also continued to trend upward at credit unions, climbing 0.4% in April to 103.2 million overall.
Liquidity improved as well, with the loan-to-savings ratio rising to 74.4% from 73.7% in April.
And on the savings front, credit union savings balances increased 0.1% during the month, pushing total savings nationwide over $1 trillion.
“On the whole, CUNA’s estimates are consistent with [the National Credit Union Administration’s] estimates that credit unions posted 21 consecutive quarters of positive net income,” Pineda added. “And the impact of credit unions on their taxpaying member-owners and the macroeconomy continues to be net positive.”