Member Savings Hit 12-Month Low

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Credit union members put away less money in savings during August.

Analysis by CUNA shows savings balances at credit unions decreased 0.9% in August, the slowest growth rate in the past year. For the year, savings are up 1.6%, said CUNA's Economics and Statistics department, and now stand at $583.6 billion, up from $566.9 billion one year earlier.

CUNA VP-Economics & Statistics Mike Schenk credited the "super slow savings growth" to three factors: the fact most Americans are not good savers; credit union pricing on certificates has trailed banks' pricing (although CU savings rates are slightly higher), and increases in market rates have changed yields on money market accounts. Even with the lower rates, certificates were the only savings category to increase at credit unions, up 1.6%.

"With almost all of savings growth typically happening in the first half of the year, we don't expect to see a huge savings growth for the rest of the year," said Schenk.

Meanwhile, lending was up 1.7% during August and 7.9% for year-to-date, with loan balances at CUs at $462.7 billion. Leading the way on the loan side of the balance sheet were new auto loans, up 3.3% and representing 17.8% of total loans outstanding, compared with 17.1% in August 2004.

"It's a bit of a relief that credit union new auto loans have grown relatively quickly," Schenk said. "Credit unions are more easily able to compete with loans prices with the large automakers offering employee pricing instead of 0% financing."

According to CUNA, versus one year earlier, loans were up 10.5%, pushing the industry average loan-to-share ratio to 79.3%.

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