Storm Clouds Gather Over CU Loans

MADISON, Wis. – Loan delinquencies continued to rise for credit unions, with the average delinquency ratio moving up to 0.89% for November, the highest in almost a decade, according to CUNA.
 
The delinquency ratio, which was 0.84% at the end of October, has been moving up steadily over the past year as more and more members experience troubles repaying their loans. CUNA economists have predicted delinquencies could rise above 1% next year, with charge-offs also expected to increase.
 
CUNA reported that lending grew by 0.4% in November–just before the onset of the holiday spending season–making a 6.8% growth rate for the first 11 months of the year.
 
Share growth, aided by a fifth payday in November, was a strong 1.4%, but was only 5.2% for the first 11 months. With savings growth outpacing loan growth, liquidity eased somewhat for the industry, to an 83.6% loan-to-share ratio, from a 10-year high of 84.6% the month before.