Loan demand for credit unions declined in February for the sixth month in a row and has fallen more than 2.2% over the past year, the Credit Union National Association reported Monday.
The unprecedented drop in lending comes as consumers continue to work to pay down record household debt, dampening loan demand for credit unions and banks alike, Bill Hampel, chief economist for the CUNA, said in a press release.
"Loans are down 1% for the [first two months of the] year. That's a really, really weak performance," Hampel said.
Small growth in mortgage lending for February was countered by declines in lending for home equity, new and used autos, credit cards and personal credit.
Noting that loan growth is typically slow early in the year, Hampel predicted slack or negative growth for the next few months before demand picks up around May.
Hampel predicted loan growth, which was negative 1.4% for last year — the worst performance in three decades — to rise gradually and reach 4% to 5% for the year as household debt falls and the economy begins to grow.
