Credit union loans outstanding grew 1.0% in August, compared to a 0.7% increase in July, CUNA’s Monthly Credit Union Estimates for August show.

Fixed-rate mortgages and unsecured personal loans led loan growth during the month, rising 1.5%, followed by other mortgages (0.7%), used auto loans (0.8%), credit card loans (0.6%), adjustable-rate mortgages (0.5%), and new auto loans (0.2%). On the decline during the month were home equity loans (-0.1%)

CUNA’s Monthly Credit Union Estimates for August showed an increase in credit union loan growth for the month from 0.69% in July to 0.96%.

“Year-to-date loan growth (4.11%), however, is the lowest its been since August 2012 and loan growth over the past 12 months was just 6.64%,” said Samira Salem, CUNA senior policy analyst. “Slower economic growth combined with less pent up demand for automobiles and a weaker housing market are contributing to the lower year-to-date loan growth performance.

“Indeed, automobile loans and mortgages make up about 85% of credit union loan portfolios, underscoring the significance of the slowdown in automobile sales and the housing market,” she added. 

Growth in the following loan categories drove overall credit union loan growth in August:

• Total first mortgages grew from 0.72% in July to 1.23% in August;
• New auto loans grew from 0.08% in July to 0.23% in August; and
• Used auto loans grew from 0.71% in July to 0.79% in August.

“To put this growth into context, August year-to-date growth in first mortgages (4.75%) was the lowest it’s been since August 2016 and August year-to-date loan growth figures for new and used automobiles (-0.37% and 4.04%, respectively) were the lowest they’ve been since August 2011,” Salem said.

There was a slight decrease in the August growth rate for unsecured personal loans, from 1.50% in July to 1.46% in August.

“However, growth over the past 12 months was a healthy 8.98%. Year-to-date growth in unsecured personal loans has been strong, registering 4.89% in August and making it the fastest year-to-date growth rate since August 2015,” she said.

Samira called August savings growth “exceptionally robust,” as it came in at 1.69%, up from -0.22% in July. This growth rate was the fastest August since 2001.

Strong growth in share drafts (6.64% up from -2.83% in July), money market accounts (1.52% up from 0.63% in July), and certificate of deposits (1.83% up from 1.31% in July) drove these results, despite slightly lower average interest rates offered on all three,” Salem said.

The loan-to-share ratio decreased from 84.50% in July to 83.89% in August as a result of higher savings growth relative to loan growth.

Membership growth in August increased slightly from 0.25% in July to 0.32%. Year-to-date credit union membership growth while up 2.40%, is lower than last August’s year-to-date growth of 3.25%. “Contributing factors include slower economic growth and slower auto loan growth, which heavily influences membership growth rates,” Salem said. “If this trend continues, it’ll be the lowest annual growth in credit union memberships since 2014.”