The Credit Union National Association's chief economist is expecting the industry's delinquency ratio to start rising after a 13-year slide.

The rise would be a side effect of last year's dramatic loan growth, and neither regulators nor credit union officers seem very worried.

"Delinquency seems to have bottomed out," said CUNA chief economist William F. Hampel Jr.

The industry's delinquency ratio has been hanging right around 0.9% since December, Mr. Hampel said. The ratio has been falling since 1982, when it was at a peak of 3.8%.

Mr. Hampel said loan growth in 1995 will be slower than in 1994. In such an environment, older loans have the effect of pushing up the ratio of delinquent to total loans.

He predicted further growth in the ratio as more credit unions engage in risk-based lending - extending credit at higher rates to applicants who once would have been rejected - and heed the NCUA's message of lending to lower-income people.

"It will rise a bit for the rest of the year simply because of slower loan growth, and over the next couple years it might rise to 1.25% or 1.5% because of more aggressive lending," he said.

But "the economy isn't going to tank, so there won't be a systemic credit problem," Mr. Hampel added. "We're not going to have an economically induced erosion of credit quality."

David M. Marquis, director of examination and insurance for the National Credit Union Administration, said such an increase is possible.

"It's common that as the loan-to-deposit ratio goes up, the delinquency ratio will go up as well," he said. "I can't see it as having any detrimental effect."

Unsecured loans would be the most likely loan type to drive any delinquency increase, Mr. Marquis said.

"People usually go delinquent on unsecured credit first, before they would on cars or mortgages," he said.

Mr. Marquis said he didn't expect any particular geographic area to be the engine for a delinquency increase. Instead, the agency is monitoring credit unions across the country affected by military base closings or corporate cutbacks.

An uptick in delinquency resulting from last year's growth in lending shouldn't threaten credit unions, Mr. Marquis said.

Indeed, profits from growing loan portfolios are greater than those from investments, and should offset any negative impact, he said.

Predictions of credit union officials ranged across the spectrum, but most said they expected, or deemed possible, a slight increase in delinquency. No one, however, predicted anything calamitous.

"Our delinquency ratio goes between 0.4% and 0.5% right now," said Rick Rice, chief executive of Teachers Credit Union. "I don't think there'll be an uptick because we've been putting a lot of loans on the books, so the range could go up to between 0.5% and 0.6%."

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