Skip to main content

Are you keeping up?

By Jim DuPlessis | October 06, 2020 at 06:08 PM
CUTimes

Credit union loan balances have returned to the relatively weak growth rates that prevailed before the pandemic, according to a CUNA report released Tuesday.

However, CUNA data showed that first mortgages are the only major sector supporting the portfolio growth. A year ago, above average growth also came from credit cards and unsecured personal term loans.

CUNA’s Credit Union Monthly Estimates report showed total portfolios stood at $1.18 trillion as of Aug. 31, up 6.6% from a year earlier. Total loan grew 6.4% from August 2018 to August 2019, falling to a low of 6.1% for November, then rose to a high of 6.9% in March on the precipice of the pandemic.

Overall portfolio growth slowed after the World Health Organization declared COVID-19 a pandemic on March 11, but not so much. The lows were a familiar 6.4% in April and June. The highs were 6.6% for May and August.

What has changed is a sharp drop in personal lending and an even hotter housing market. And car lending, which was weakening before the pandemic, has continued downward. Total car loans grew 8.8% from August 2018 to August 2019, but only 2.5% from August 2019 to August 2020.

A year ago, credit unions’ personal loan portfolios were growing nearly 9%, and credit card growth was about 7%.

As of July, personal loan growth had fallen below 3% and credit card portfolios had fallen nearly 6%. The Fed will release August data for credit cards late Wednesday.

Meanwhile, CUNA reported credit cards and personal loans in a combined “unsecured loans” category that had a balance of to $113.2 billion on Aug. 31, up 2.3%. A year earlier, from August 2018 to August 2019, unsecured loans rose 7.5% to $110.7 billion.

LendingTree reported Tuesday that interest rates “are among the lowest since the coronavirus crisis began” for personal loans offered to prospective borrowers on its platform during the week that ended Sept. 26 — “for all but subprime borrowers.”

“We did see a small dip in the number of consumers seeking these loans this week, but if rates continue to fall, it seems unlikely that consumer interest in personal loans will fall with them,” Matt Schulz, chief industry analyst for LendingTree, said.

First mortgage portfolios rose 12.3% to $509.4 billion as of Aug. 31. The year-ago comparisons actually spiked after the pandemic. The lows were 7% to 9% gains in the first two months of the year, rising to gains of 11% to nearly 14% from March to July.

CoreLogic’s Home Price Index released Tuesday showed prices for single-family homes in August were 5.6% higher than a year ago and 1% higher than in July.

However, it predicted price will rise only 0.2% from August to September and 0.2% from August 2020 to August 2021.

“Despite the continued pressures of the pandemic, consumer home-purchasing power has stayed strong as mortgage rates remain at record lows,” the report said. “Meanwhile, for-sale inventory has continued to dwindle, dropping 17% year over year in August, which created upward pressure on home price appreciation as buyers compete for the limited supply of homes.

“Home price growth is expected to slow as greater availability of new and existing homes are placed for sale in 2021 and elevated unemployment saps buyer demand.

Areas at high risk of falling prices include Las Vegas and Miami that have been hard hit by the collapse of the tourism market.

A related concern is loan quality. The Mortgage Bankers Association reported Monday that 3.4 million homeowners were in forbearance plans, representing 6.87% of nation’s mortgages as of Sept. 27, down from 6.81% a week earlier.

“As of the end of September, there continues to be a slow and steady decrease in the share of loans in forbearance,” MBA Chief Economist Mike Fratantoni said.

“The significant churn in the labor market now, more than six months into the pandemic, is still causing financial distress for millions of homeowners,” Fratantoni said. “As a result, more than 70% of loans in forbearance are now in an extension.”

 

 

Comments

Post a Comment

Please no profanity or political comments.

Popular posts from this blog

Hurricane Knocked The Power Out? New Orleans Firemen’s FCU Is Ready.

  Hurricane Knocked The Power Out? New Orleans Firemen’s FCU Is Ready. The next big storm in the Gulf isn’t an “if,” it’s a “when,” but the small Gulf-area credit union has a plan to help the community get back on its feet when the time comes. Aaron Passman This article is part of Callahan & Associates’ “ CDFI Grants In Action ,” a limited editorial series that showcases how credit unions leverage CDFI funding to advance their mission and deliver measurable impact for members. To learn how CDFI certification can change lives and unlock opportunities at your credit union, visit  CU Strategic Planning , A Callahan Company. When hurricanes rip through the Gulf, they leave behind disrupted lives and disconnected communities. In those moments, access matters as much as empathy. When disaster strikes,  The New Orleans Firemen’s Federal Credit Union   ($275.0M, Metarie, LA) is ready to roll with a mobile branch that brings back banking to the front line of recovery. The...
Post a Comment
Read Complete Article HERE>»

Sunday Reading - Lake Manly Returns

  Lake Manly Returns   An ancient lake has  reemerged in California's Death Valley National Park following record rainfall this year.  Between 128,000 and 186,000 years ago, meltwater from ice covering the Sierra Nevada fed rivers that emptied into Badwater Basin, North America’s lowest point at 282 feet below sea level. The steady flow sustained Lake Manly, nearly 100 miles long and roughly 600 feet deep. The lake disappeared as Death Valley evolved into the driest place in North America , with some areas receiving under two inches of rain annually. This year, however, the park received 2.41 inches between September and November, marking its wettest autumn on record and triggering the temporary return of a shorter, shallower Lake Manly.  Above-average rainfall periodically brings Lake Manly back, including in 2023 when Hurricane Hilary dumped 2.2 inches of rain on a single August day, allowing visi...
Post a Comment
Read Complete Article HERE>»

The US Senate makes major step towards recognizing firefighter cancers as line‑of‑duty deaths

   18 Dec 2025 The US Senate makes major step towards recognizing firefighter cancers as line‑of‑duty deaths en Fire Fighter´s Advocacy   Firefighter Cancer   Firefighter Unions   Firefighter's Health   Line of Duty Deaths The US senate  has passed the   Honoring Our Fallen Heroes Act , recognizing firefighter occupational cancers as line‑of‑duty deaths and extending federal benefits to families. This marks a shift in U.S. policy towards aligning with decades of advocacy by firefighter unions and survivors. According to a statement on IAFF.org,  the passing of the Act in the Senate is a "major step forward for the thousands of survivors who have been denied PSOB benefits after losing their loved one to cancer...  It now moves to the U.S. House of Representatives for consideration." According to IAFF.org, the Honor Act has strong bipartisan support in both chambers of Congress. A companion bill in the House ( H.R. 1269 ) currently has 152...
Post a Comment
Read Complete Article HERE>»

Happy Holidays To All Who Serve

  Happy Holidays To All Who Serve 12/22/2025 10:28 am   By Grant Sheehan and Anthony Hernandez Every year, many Americans celebrate the joy of family and relief from work the holidays bring. Apart from the hustle and bustle, the holiday season is a special time to be with loved ones, engaging in family traditions and rituals, and making memories that will last a lifetime. However, not everyone gets to partake in the holiday gatherings.   There are over a hundred thousand military members serving in harm’s way or in 24-hour command center...
Post a Comment
Read Complete Article HERE>»

Sunday Reading - The gold standard, explained

  Gold Standard       The gold standard, explained A gold standard is a system where a country’s currency is pegged to, and can be converted into, a fixed amount of gold. It’s typically meant to create a sense of security in the country’s currency: When a government uses a gold standard , its currency can be exchanged for an equivalent amount of gold—although regulations around redemption vary by country.   After the Civil War, in 1873, America adopted the gold standard for the first time. At the time, if gold was priced at $100 an ounce, each dollar  rep...
Post a Comment
Read Complete Article HERE>»

Syracuse Fire Department Credit Union

Remember, you're not alone with  NCOFCU.org Join/Upgrade Check out some of NCOFCU's additional features: First Responder Credit Union Academy Financial Literacy Podcasts YouTube Mini's Blog Job Board
Post a Comment
Read Complete Article HERE>»

Buy Now, Pay Later Keeps Gaining Ground: New Study Shows Growth Surge

03/10/2025 06:31 pm Share         TROY, Mich.— A new study reveals the appeal of buy now, pay later is not waning, as the service saw significant growth last year. The J.D. Power 2025 U.S. Buy Now Pay Later Satisfaction Study shows BNPL enjoyed continued, significant growth in the number of consumers using the product year over year, with the highest usage among consumers from Generations Y and Z, and the highest growth period during the holidays. “The BNPL segment has undoubtedly grown in popularity, with more customers using these services than ever before,” said Sean Gelles, senior director of banking and payments at J.D. Power. “That’s been especially true around seasonal periods of higher spending, such as the holidays. Card-based BNPL products continue to lead the charge on satisfaction, as issuers are leveraging their existing brand awareness and equity to retain would-be defectors.” Following are some of the key findings of the 2025 study: Gene...
Post a Comment
Read Complete Article HERE>»

Sunday reading - What's the story behind Thanksgiving?

What's the story behind Thanksgiving? While European settlers in North America had long observed days of thanks, prayer, and reflection, the “ first Thanksgiving ” most often refers to a 1621 meal between the Pilgrims and the native Wampanoag people.   In 1863, Abraham Lincoln declared a national Thanksgiving Day on the final Thursday of November to be celebrated each year. A large meal shared with loved ones is the centerpiece of most Thanksgiving celebrations, where the average gathering size is seven and most people consume 3,150-4,500 calories .   What began as a neighborly meal to celebrate a successful harvest has transformed into an annual economic and cultural powerhouse: The day before Thanksgiving is one of the busiest days of the year for air travel as Americans prepare to eat upward of 40 million turkeys  and 80 million pounds of cranberries. ... Read what else we  learned about the holiday here . ...
Post a Comment
Read Complete Article HERE>»

The Market Review

The Market Review Payroll Tax Cuts Extended, U.S. Data Mixed, ECB Steps Up SupportThe past week has seen moderate progress on several fronts. First, the EU markets were bolstered by a massive lending program from the ECB to over 500 banks. The banks borrowed €489 billion in 3-year loans at a rate of 1.00%.
Post a Comment
Read Complete Article HERE>»

Here’s What Consumers are Saying About Gift Cards, According to New Fiserv Study

BROOKFIELD, Wis.–Eighty percent of consumers say they enjoy receiving a gift card as a gift, and 68% of consumers will spend the full value of that gift card in three months or less, according to the 19th Annual Prepaid Consumer Insights Study from Fiserv. The study further found employers are increasingly using gift cards to reward their employees, and retailers are finding new ways to leverage gift cards in their incentives and rewards programs. According to Fiserv, five of the most interesting findings in the survey of more than 1,000 U.S. consumers include: ‘Satisfaction’ Abounds with Gift Cards 80% of consumers say they feel satisfied when they receive a gift card, so satisfied that consumers aren’t waiting long to spend them. 71% of consumers say that it takes one or two purchases to redeem the full value of a gift card; and 68% say it takes less than three months to fully redeem. Physical Cards Still Reign, But Digital is Growing While digital gift card spending is on the ri...
Post a Comment
Read Complete Article HERE>»