Credit union loans outstanding grew 0.6% in July, compared to a 0.7% increase in June, according to CUNA’s Monthly Credit Union Estimates for July.

“According to the July monthly estimates, both credit card debt and unsecured debt were up compared to this time last year. Credit card balances grew 1.18% in July and total unsecured debt grew 1.26%. Overall, unsecured debt is up 3.21% for the year, well above the 1.92% figure at this point last year,” said CUNA Senior Economist Jordan van Rijn. “This may be a warning sign that consumers are becoming liquidity-constrained and overspending; on the other hand, it also indicates that consumers remain confident despite increased uncertainty in the market. But this makes sense given the strong labor market and historically low unemployment rate of 3.7%.”

Other mortgages led loan growth during the month, rising 1.6%, followed by unsecured personal loans and fixed-rate mortgages (both rising 1.4%), credit card loans (1.2%), used auto loans (0.5%), and home equity loans (0.4%).

“Home equity lines of credit (HELOCs) and second mortgages represent a strong source of credit union loan growth in today’s economy with continued historically low mortgage rates. Combined, these mortgage categories grew 0.88% in July and are up 4.55% for the year, slightly higher than last July’s year-to-date growth figure of 4.05%,” van Rijn said. “However, despite low mortgage rates, uncertainty in the economy and affordability challenges have slowed growth in credit union first mortgages, which are up only 3.23% so far this year, well below this time last year when first mortgages had grown 5.23%.

“But even with the dramatic slowing in loan growth, we believe the economy will continue to grow, if at a modestly slower pace,” he added.

On the decline during the month were adjustable-rate mortgages (-1.4%) and new auto loans (-0.3%).

“The July monthly estimates show a continued sharp decline in credit union auto loan growth rates. New auto loans fell 0.26% in July compared to a 0.98% increase last July, and used auto loans were up just 0.45%, down from a 0.87% increase a year ago,” he said. “Overall, new auto loan growth is just 1.50% for the year and used auto loan growth sits at 3.14%, both well below last July’s year-to-date growth figures of 6.45% and 7.00%, respectively.”

Credit union savings balances declined -0.2% in July, matching the result for June. One-year certificates led savings growth during the month, rising 1.5%, followed by regular shares (0.6%), and individual retirement accounts and money market accounts (both rising 0.4%). Share drafts declined -5.1% during the month.

“Largely driven by the decline in auto loans, credit union loan portfolios have grown at a much slower pace relative to this time last year. Overall credit union loan growth was up just 0.58% in July—much lower than the 0.82% growth last July—and year-to-date credit union loan growth is up just 2.76%, well below last July’s year-to-date growth of 5.49%,” van Rijn said. “If this trend continues, credit unions are likely to experience the lowest annual growth in loan portfolios since 2012.”

Credit unions’ 60+ day delinquency remained at 0.5% in July. The loan-to-savings ratio increased from 83.5% in June to 84.2% in July.

The liquidity ratio (the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities) declined from 14.8% in June to 13.8% in July.

Total credit union memberships grew 0.3% during June to 120.8 million. The movement’s overall capital-to-asset ratio increased from 11.1% in June to 11.2% in July. The total dollar amount of capital increased 0.1% to $171.5 billion