Credit union loan-to-share ratios are approaching levels not seen since the 1990s, CUNA Chief Economist/Chief Policy Officer Bill Hampel tells CUNA Economics & Investment Conference attendees in Las Vegas.

The long-time CUNA economist, who is retiring, spoke for the last time “as a free CUNA speaker. But I hope to return as a moderately priced consultant.”

He offers a rosy outlook for credit unions through 2018, with:

►Moderate savings and asset growth. Interest rates will remain low, although short-term rates may rise.

Credit unions may lose some core deposits, however.

“Money has had no place to grow for the past seven years; it’s been sloshing around in different places,” Hampel says. “We think a bunch of core deposits might move to money market mutual funds” as liquidity tightens.

“If you have some high-balance accounts in checking,” he adds, “it will leave.”

►Strong loan growth, fueled by increased consumer spending, job growth, and continued backlogs in durable goods.

►Normalized loan delinquency and losses. These grew substantially during the Great Recession.

“My fear was that this would make credit unions more conservative than in the past,” Hampel says. “That hasn’t happened. Credit unions tend to be more risk-averse than stock-based financial institutions, which is good for the share insurance fund in bad times.”

►A mixed outlook for net income, with stable net income for the next few years and healthy capital ratios.

Higher net interest income and the forthcoming corporate stabilization fund refund will drive earnings. At long-term risk: interchange income.

►Strong membership growth. Last year’s membership growth was an impressive 4.1%, and that level should continue.

By comparison, U.S. population growth has been less than 1% during the past five years, he notes.

Still, “we have to overcome a lack of knowledge about credit unions,” Hampel says, citing CUNA’s Creating Awareness Initiative, which aims to do just that. “We want to soften up the market for you so people have a better understanding of what credit unions are and what they do.”

CUNA’s credit union forecast calls for:

• Loan growth of 10.8% in 2017 and 9.5% in 2018.
• Savings growth of 7.5% in 2017 and 6% in 2018.
• Asset growth of 7.9% in 2017 and 6% in 2018.
• Membership growth of 4% in 2017 and 3% in 2018.
• Loan-to-share ratio of 82.9% in 2017 and 85.7% in 2018.
• Delinquency rate of 0.8% in 2017 and 0.85% in 2018.
• Earnings of 0.7% in 2017 and 0.75% in 2018.