Share Growth Slumped In 2005

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MADISON, Wis. - (02/02/06) – Deposit growth for creditunions ground to a near halt in 2005, growing by just 3.8%, thelowest since 1994, according to CUNA’s year-end data releasedto The Credit Union Journal Wednesday. Only a major influx ofbillions of dollars on the last day of the year because Decemberhad an extra payday prevented 2005 from being the slowest year everfor deposit growth. At the same time, lending expanded by a strong11.2 last year, also the highest since 1994. The similarities to1994 are no coincidence according to Mike Schenk, senior economistfor CUNA. That’s the year short-term rates rose around 300basis points, as they did last year, prompting credit union membersand other consumers to go out and borrow in the anticipation ofhigher rates. But Schenk said the experts predict the trend willmoderate in 2006, “We expect faster savings growth and slowerloan growth, but loan growth will still outpace sharegrowth,” he told The Credit Union Journal. “Thecontinuation of this as a longer term trend is unsustainable.People can’t keep saving at this low rate and borrowing likecrazy.” For December the loan delinquency rate also continuedit sixth-month rise to 0.74%, its highest in several years, as theeffects of the fall flood of bankruptcies, just as the newbankruptcy law took effect, came to bear.

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