Economic improvements benefiting CUs: CUNA’s Schenk
LAS VEGAS (12/14/15)--Among other positive results, membership at credit unions continued its healthy rate of growth during the third quarter, a CUNA expert shared recently.
Mike Schenk, CUNA vice president of economics and statistics, noted credit unions’ strength despite global economic challenges during the CUNA Supervisory Committee and Internal Audit Conference in Las Vegas last week.
“In general credit unions are in a good place and continue to see significant improvements in the economy that are beneficial to interactions with members,” he said.
Slower economic growth domestically and in developing economies took center stage in the third quarter, Schenk said. A stronger dollar slowed U.S. exports and manufacturing output in the period, and weak commodity prices translated into weaker domestic production and employment challenges in the energy sector.
Credit unions, however, experienced marginally faster loan growth, strong asset quality, high earnings and a higher aggregate capital ratio in the third quarter. CUNA’s 2015 forecast of 3.9% membership growth is likely to be surpassed.
“Looking forward, expect a modest pick-up in economic growth in the fourth quarter and into 2016,” he said. “To date, fourth-quarter data reflects further significant improvement in U.S. labor markets and personal income gains have been solid. These trends are apt to buoy consumer confidence and spur consumer spending (and borrowing) in the coming months.”
In looking ahead at this week’s Federal Open Market Committee meeting, Schenk said the Fed’s actions “will almost certainly be measured and modest.”
This environment should be favorable for credit union operations, he added. “Expect credit union membership and loan growth to stay at lofty levels,” Schenk said. “If so, that relatively strong loan growth will combine with higher employment and increasing incomes to boost credit quality.”
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