Near-term Growth Seen In CU Business,Home Equity Loans
MADISON, Wis. - (02/21/05) -- Loan growth among credit unions thisyear is expected to slow from its heated 10% pace in 2004, butshould still be warm at as much as 9%, according to the CUEconomists Group. The group of seven credit union executives andthree trade group economists predicted member business loans andhome equity loans will pace credit union lending this year. "Whilefirst mortgage and vehicle loan growth should remain steady, homeequity loans and business loans--particularly in larger creditunions--should continue to grow," said Bruce Beaudette, presidentof Sunmark FCU, Schenectady, N.Y. "Rising property values over thepast several years have created an outstanding home market andmembers are taking advantage of this new-found equity to refinanceother debt and make large purchases in the Northeast." Creditunions can expect a further flattening of the yield curve as theovernight FedFunds rate climbs towards 3.7% by year-end andlong-term mortgage rates move towards 6.5%, according to Tun Wai,chief economist at NAFCU and one of the founders of thegroup.