CUNA is now America's Credit Unions.
A stronger voice to advance the credit union industry.
My first car was a 1972 Grand Prix 455 V-8. It was big, loud, and fast. The ride was incredible—like butter.
It was a two-door hardtop, gray with a plush, ruby-red interior. Before “electric” was a thing, it had electric everything: door locks, mirrors, seats, windows—even a switch that controlled the moon roof.
I bought it from my uncle in 1982 for $1,500. Its most distinctive feature was extensive rust. Passenger-side riders had to climb through the window to get in the door (it was rusted shut). The moon roof leaked like a sieve when it rained (it was rusted open).
My most distinct memory, however, was that I didn’t have the cash to buy it. Banks wouldn’t lend me the money, but my credit union did. It was transformational. The credit union took a chance on me, and I’ll never forget it. I needed that car to go to work, pay the rent, and get to class on time—basically to get ahead in life.
I’ve heard other credit union people tell “my story” countless times. Chances are, if you work for or with credit unions you’ve heard it, too. Often.
This story—my story—is a big part of credit union lore. After all, access to reliable transportation is a foundational aspect of financial well-being for millions of consumers: those who need a lender willing to listen to their story, make an exception, and take a chance.
Collectively, credit unions do a pretty good job of telling my story. But we generally fall short when it comes to measuring the impact it has.
How many auto loans do you make to first-time buyers and those on the bottom rungs of the economic ladder? How many chances does your credit union take?
How much money did you save members who live paycheck to paycheck?
In the wake of the COVID-19 pandemic, answers to those questions are more important than ever.
COVID magnified challenges for almost everyone. But it was especially tough on average front-line workers: minimum wage earners who had to be at work but who faced public transit interruptions in many cities.
Supply chains also were disrupted, making it more difficult to obtain alternative transportation. New car and light truck sales plummeted from 17 million units in 2019 to 14.5 million in 2020 and 15 million in 2021. In the first eight months of 2022, the annualized monthly sales rate averaged just 13.7 million units—down 19.5% compared with the pre-pandemic 2019 readings.
Those trends greatly increased demand for used vehicles, which is where many front-line workers turn when shopping for a car. Prices jumped dramatically.
The Bureau of Labor Statistics reports used car and truck prices spiked 26.6% in 2021 and 15% in the 12 months ending July 2022. Many people were priced out of the market. But signs of a rebound are increasingly obvious.
For example, CUNA’s Monthly Credit Union Estimates (MCUE) Report—based on a survey of hundreds of credit unions nationwide with results asset-weighted to represent movement-wide results—shows that credit union loans outstanding increased 10% in the first half of 2022. That’s an eye-popping 20% annualized rate and the fastest first-half increase in the 32 years we’ve collected this data.
A big contributor to that result was credit union auto lending, which grew at a 12% rate (24% annualized) in the first half of 2022. It’s a compelling story.
This year, CUNA acquired a 10% sample of the Equifax database, with monthly observations going back to 2005. In all, our sample consists of 28 billion records and counting.
Our goal is to tell this compelling story—and similar credit union stories—to any and all consumers and policymakers who will listen. What are we seeing?
First, it confirms the trends revealed in our MCUE data. More importantly, it reveals that despite supply chain disruptions and other dislocations, credit unions have a clear and strong commitment to ensuring members have affordable, easy-to-get auto loans. Credit unions are clearly punching above their weight in the auto loan arena today.
While credit unions control only 8% of depository financial institution assets, second-quarter 2022 Equifax data shows that credit unions accounted for a 37% market share of total auto loan originations in the second quarter of 2022. That includes originations among all depository financial institutions and all nondepository finance companies, including captive financers and buy-here, pay-here companies.
Credit union market share of total auto loans outstanding (including securitized loans) totaled 30.7% at mid-year 2022, a nearly four percentage point increase compared to year-ago readings.
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