CUNA Senior Economist Dawit Kebede spoke during a World Council of Credit Unions webinar on the effect on credits unions during the pandemic and the economic picture going into 2022.

“There is perfect correlation with economic downturn and [credit union] loan growth,” said Kebede, adding that the demand for credit will decline with economic downturns.   

For the recessions of the eighties, nineties, and the great recession of 2007, credit union loan growth went into “negative territory.”

“In 2021, our economic levels have rebounded,” said Kebede. “According to the Bureau of Economic Analysis, we not only achieved pre-pandemic levels of economic output, but we also exceeded it.”

Credit union products such as commercial loans and refinances have helped loan growth rates from falling into the negative, while new auto loans, credit cards, second mortgages, and home equity loans have fallen. Commercial loans driven by payment protection programs saw the biggest spike of all. These were the product of government pandemic support programs.

“Coming into 2021, you can see even those products that were experiencing low loan rates, are now trending upwards,” said Kebede.

Both credit union loan and membership growth are expected to increase as vaccinations increase consumer confidence coming back within the first half of 2022. Consumer spending is expected to go up as well.

“We believe that loan growth will reach 6% by the end of this year and in 2022, it will go up to 9%,” said Kebede. “By the end of 2022, we expect membership to grow up to 4%.”

There was a record high of savings growth in 2020.  Savings began to go down in the first two quarters of 2021, and it is believed savings will go down by 12% by the end of the year and down to 6% by 2022.

The complete webinar is available on the World Council's YouTube page, or can be viewed below.