MADISON, Wis. In a strong sign that the U.S. economy continues to recover, credit union lending outpaced savings in 2013.
This is the first time lending has topped savings since 2007, according to the Credit Union National Association, which released its monthly sample of estimates in a report Wednesday.
Credit union loan balances rose 6.8% last year, up from the 4.8% in 2012.
Resurging new car sales contributed a lot to the shift, said CUNA Senior Economist Steve Rick. "Credit union members were in a car-buying mood with new auto loans and used auto loans up 10.9% and 8.9%, respectively," Rick said.
Members tapped the brakes on savings, as credit union savings growth decelerated to 4.3% in 2013 from 6.1% one year earlier. Credit union savings balances declined 0.1% in December compared with a 0.9% increase in November.
One-year certificates (1.1%) and money market accounts (0.6%) increased during December. Share drafts, regular shares and individual retirement accounts declined 5.3%, 0.1% and 0.04%, respectively.
CUNA predicts that CU loan balances will rise 7% in 2014. "Expect households to release pent-up demand for autos, furniture and appliances over the next two years," Rick said.
CU loan-to-share ratio rose to 70.3% in December, up from 68.6% one year prior.
Rick said that member savings reflect a need for safe, short-term liquid deposit accounts.
Regular share balances rose 8.6%, followed by money market accounts up by 3.9% and share draft accounts up 5.9%. Credit union savings balances are expected to grow 4% in 2014, according to Rick.