Total credit union membership grew 0.26% in September, to 117.9 million according to CUNA’s Monthly Credit Union Estimates, while loan growth rates for the month were 0.69%. Both rates represent a decline from August, but CUNA Senior Economist Samira Salem said part of the decline is standard this time of year.
“Credit union membership and loan growth tend to be slower in the month of September,” she said. “Still, year-over-year rates are 4.4% for membership growth and 9.8% for loan growth. The latest CUNA 2018 forecast puts membership and loan growth at still healthy, yet slightly lower rates of 4.1% and 9.5%, respectively.”
In late September, the Federal Open Market Committee raised interest rates for the third time this year. Credit union loan and deposit rates, which have been steadily increasing over the past year, increased across all ten major categories of interest rates that CUNA tracks in September.
Credit union loans outstanding grew 0.7% in September 2018, compared to a 1.0% increase in August. Unsecured personal loans led loan growth, rising 1.2%, followed by fixed-rate mortgages (0.84%), new auto loans (0.81%), used auto loans (0.77%), adjustable-rate mortgages and home equity loans (both rising 0.4%), and credit card loans (0.2%). On the decline during the month were other mortgage loans (-0.2%),
Credit union savings balances declined -0.4% in September, compared to a 1.4% increase in August. One-year certificates led savings growth during the month, rising 0.8%, followed by individual retirement accounts (0.1%).
On the decline during the month were share drafts (-2.9%), money market accounts (-0.4%), and regular shares (-0.3%).
“These declines drove credit unions’ weak savings performance this month. Growth in certificate of deposits (CDs) of 0.79% and growth in IRAs of 0.14% moderated the overall savings decline,” Salem said. “The growth in CDs and IRAs were buoyed by relatively large increases in deposit rates over the last year.”
Credit unions’ 60+ day delinquency remained at 0.7% during September.
“Since the beginning of the year, delinquency rates have been on a steady decline. They’ve declined to 0.65% in September from 0.81% in January,” Salem said. “An improved labor market characterized by historically low unemployment rates, consistently strong job growth, and increasing real wages is likely contributing to the improved credit quality and strong loan growth at credit unions.”
The loan-to-savings ratio increased from 84.5% in August to 85.5% in September. The liquidity ratio (the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities) declined from 13.4% in August to 12.6% in September.
The movement’s overall capital-to-asset ratio declined from 10.7% in August to 10.6% in September. The total dollar amount of capital increased 0.5% to $158.2 billion.