Thursday, September 16, 2021

Economists with both credit union trade associations saw some good news in the CPI numbers.

ARLINGTON, Va.—On a seasonally adjusted basis, overall consumer prices rose 0.3% in August, with the Bureau of Labor Statistics reporting the overall consumer price index (CPI) grew 5.2% over the 12-month period.

Economists with both credit union trade associations saw some good news in the numbers.

NAFCU Chief Economist and Vice President of Research Curt Long noted that this is the "slowest increase in both CPI and Core CPI since February."

Core prices (excluding food and energy costs) rose 0.1% compared to July. Year-over-year core CPI growth was 4%.

"Prices dropped for used vehicles (-1.5%), hotel rates (-3.3%), and airfare (-9.1%) after rapid increase earlier this summer," said Long. "This is the first decline in auto prices since January."

Energy prices rose 1.6% during the month, following a 1.5% rise in June. From a year ago, energy prices were up 23.6%. Additionally, food prices rose 0.7% in July and were up 3.4% compared to this time last year.

"Supply chains are still driving increased costs as material and labor shortages cause ripples across the globe," added Long. "The Fed remains adamant that inflation will cool over time and inflationary pressures will abate as supply bottlenecks ease, but housing costs will be key, as rent is about a third of the basket of goods calculated by the Labor Department. It appears the summer spike in prices has passed, and although inflation will remain above 2% from some time, it won’t warrant a rate hike until 2023.”

CUNA Analysis

Meanwhile, CUNA Senior Economist Dawit Kebede issued said of the numbers, “The good news is that the August inflation report was on target with what was expected. The slight monthly price increase of 0.3% is close to the pre-pandemic average but the annual rate remains high compared to last year.

“On the other hand, there are indications that the strong economic growth we saw in the second quarter is slowing down. We know this because of the decline in the consumer sentiment index amid concerns of the Delta variant and a slower job market.

“The Federal Reserve will probably delay slowing its purchase of Treasury and mortgage-backed securities despite slight indications that the price increase in durable goods is transitory, as illustrated by the reduction in used car prices. This is because we are far from maximum employment.”

Monday, September 13, 2021

Significant reduction in overdraft fee.


OKLAHOMA CITY, Okla.––WEOKIE Credit Union has become the latest to announce a significant reduction in its overdraft fee.

The $1.3-billion WEOKIE said it is reducing its NSF charge by nearly 50%, cutting the fee to $15 per occurrence from $27.50.

WEOKIE Federal Credit Union is the first financial institution in Oklahoma to announce a decrease of their members’ overdraft and non-sufficient funds service charges by almost 50%. The applies to all accounts, including checking and savings.

“WEOKIE strives to be a positive force in the community, and many Oklahomans are facing financial hardships in the face of a pandemic and inflation,” said WEOKIE President and CEO Jeff Carpenter in a statement first reported by the Cornerstone CU League. “We are eager to step up and help our members’ financial well-being by delivering real solutions, building trust, and helping our members grow their savings.

‘Do The Right Thing’

“WEOKIE’s mission statement is, ‘Do the right thing,’ and I believe we are doing right by our members with this decision,” Carpenter added. “We believe this move is critical to achieving our vision of becoming our members’ most trusted financial partner and two of our strategic priorities related to providing financial well-being for all and delivering the benefits of a cooperative ownership.”

As has reported, WEOKIE is not alone in reducing its NSF fee. In Madison, Wis., UWCU has reduced its overdraft fee to $5. Ally Bank has announced it is eliminating its overdraft fees, and so have Alliant Credit Union and Westerra Credit Union.

Friday, September 10, 2021

First mortgages, used car loans and credit cards were responsible for most of the lending gains among credit unions in July.

New car loan balances continued to decline.

The Fed’s Consumer Credit Report released Wednesday showed credit unions held $61.5 billion in credit card debt July 31, up 1% from a year earlier — the first 12-month gain since April 2020.

Balances rose 0.9% from June to July, compared with an average June-to-July gain of 1.2% from 2015 to 2019.

Recovery from pre-pandemic levels was slow. Card balances were still 6.5% below February 2020 levels at credit unions — unchanged from June. Balances at banks were 9.1% below February 2020, an improvement from June’s 9.5% deficit.

Credit unions held 6.4% of the nation’s credit card debt as of July 31, unchanged from a month or a year earlier.

Banks held $860.3 billion in credit card debt July 31, up 0.9% from a year earlier and up 0.5% from a month earlier. Their share was 90% in July, unchanged from June and up from 89.7% in July 2020.

CUNA’s Monthly Credit Union Estimates released Sept. 3 showed credit unions held $1.23 trillion in loans as of July 31, up 4.8% from a year earlier. The 0.8% gain from June was only slightly behind the pre-pandemic average of 0.9%.

New car loans fell 2.1% to $140.6 billion, while used car loans grew 6.4% to $254.1 billion.

From June to July, new car loan balances fell 0.1%, while used car balances rose 0.8%. The pre-pandemic average was 1% for both.

First mortgages grew 8% to $548.9 billion. A year earlier, from July 2019 to July 2020, it rose 13.4%. Second-lien mortgages fell 6.1% to $85.1 billion. A year earlier, it fell 2.4%.

The 60-day-plus delinquency rate was 0.44% as of July 31, unchanged from June and down from 0.54% in July 2020.

  • The nation’s 5,218 credit unions had 129.4 million members in July, up 3.3% from a year earlier. Other balances and 12-month changes in the report included:
  • Loans per member grew 1.5% to $9,532. A year earlier, from July 2019 to July 2020, they rose 3.7%.
  • Assets grew 13.7% to $2.05 trillion. A year earlier, they rose 17%.
  • Fixed-rate first mortgages rose 12.5% to $431.7 billion.
  • Adjustable-rate first mortgages fell 6.1% to $117.2 billion.
  • Second mortgages fell 10.2% to $29.6 billion.
  • Home equity lines of credit fell 3.7% to $55.5 billion.
  • Savings grew 14.8% to $1.77 trillion, compared with an 18.5% gain a year earlier.
  • Savings per member grew 11.1% to $13,656, compared with a 14.7% gain a year earlier.