MADISON, Wis. (11/23/15)--CUNA Senior Economist Mike Schenk discussed the flourishing auto loan market and how it is increasing credit union membership in a Boston Globe article published Friday.
Credit unions are attracting a larger share of the auto lending business, and that has helped translate to higher membership in Massachusetts and nationwide,the Boston Globe reported. “Credit unions require people to become members, typically by opening a small account, before they can get a loan.” Credit union profits are returned to members, often in the form of lower fees and better interest rates.
Schenk told the Globe that auto loans are bringing in 35% to 40% of new members to the nation’s credit unions.
In Massachusetts, credit union membership has climbed at its fastest pace in five years, reaching 2.6 million members in the second quarter of 2015, up about 5% from the same time last year. Nationally, credit union membership is up 3%.
Schenk said credit unions expect to see strong auto lending through 2016. Auto loans are an important product for credit unions, Schenk said. Although members don’t use the account for daily transactions--as they do a checking account--they often come back when they are buying another car.
“Even though the relationship is different,” Schenk said, “it is an important relationship.”