CUNA Mutual Group’s trends report on credit union financials for February revealed that lending was growing at a slower pace.
Credit union loan balances edged up by 0.1% in February, below the 0.2% pace from a year earlier. CUNA Mutual noted that, due to seasonal factors, February is “historically the weakest loan growth month of the year.”
Over the 12-month period through February, loan volumes grew by 8.6%, below the 9.8% reported for the same period a year earlier.
Auto loan volume climbed by 9.5% over the 12 months that ended in February, down from 10.8% for the same period a year earlier. CUNA Mutual indicated auto loans are still fairly robust, citing strong consumer fundamentals, healthy labor market, low oil prices, faster wage growth, low interest rates and better household balance sheets.
First mortgage loan volumes at credit unions rose by 8.5% through the year that ended in February, down from the 10.1% growth rate recorded for the year that ended in February 2018.
Overall, real estate loans at credit unions rose by 8.4% for the 12-month period that ended in February, versus a 9.6% growth rate from a year earlier.
“U.S. home prices are rising faster than incomes due to limited supply of homes colliding with steady demand,” CUNA Mutual said in the report. “The shortage of new homes is due to homebuilders not producing enough new inventory to satisfy demand."
The credit union loan delinquency rate totaled 0.69% for the 12 months that ended in February, down from the 0.72% reported for the same period a year earlier. CUNA Mutual partially attributed the decline in delinquencies to the personal income tax cuts enacted last year.
During February, credit unions added 281,000 in new members, a 0.24% gain for the month, but down from the 0.4% gain posted in February 2018. Over the 12 months that ended in February, membership rose by 3.9%, due to “robust demand for credit, solid job growth and comparatively lower fees and loan interest rates.”
CUNA Mutual expects credit union membership growth to exceed 3.5% in 2019, which will increase the total number of members to 122.3 million by year-end, or about one-third of the total U.S. population.
At the end of February, there were 5,583 credit unions, four less than in January. CUNA Mutual projects that number of credit unions will fall by 180 this year.
