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Loan Growth Part 3

MADISON, Wis.–Credit union loan balances rose 1.1% in February, faster than the 0.2% reported in February 2021, even as membership growth slowed significantly during the first two months of 2022, according to data released as part of CUNA Mutual’s April Trends Report.

The Report, which is based on data through February, showed overall loan growth was 9.6% during the last 12 months.

What is actually happening below the surface? According to the Trends Report, consistent with the trend line the analysis shows large credit unions reported significantly faster loan growth in 2021 as compared to smaller credit unions. Credit unions with assets greater than $1 billion reported loan growth of 8.4% compared to credit unions with assets less than $20 million, reporting loan growth of 0.9%.

Here's a look at how credit unions performed by category, according to the newest Trends Report”

Trends Loan Growth by Assets

Credit Union Lending

Credit union loan balances rose 1.1% in February, faster than the 0.2% reported in February 2021, and 9.6% during the last 12 months, according to the Trends Report, which said growth was driven by first mortgage loans balances (1.3%), home equity loan balances (1.2%) and used-auto loan balances (1%).

Trends Coonsumer Installment Credit

Consumer Installment Credit

The Trends Report shows credit union consumer installment credit balances (auto, credit card and other unsecured loans) rose 1% in January, significantly above the 0.1% reported in February 2021.

“Consumer installment credit year-over-year growth rates have been rising over the last year due mainly to a surge in used- auto loans and credit card lending,” CUNA Mutual said. “During the last year, credit union members were using funds from cash-out mortgage refinances to pay down higher-rate consumer loan debt and using around 30% of their stimulus checks to pay down debt. Those two behaviors have come to an end with rising mortgage interest rates and the ending of the COVID pandemic.”

According to the Trends Report, credit union consumer installment credit grew 7.4% during the last year, faster than the total market, excluding credit unions, which rose 6.7%. The total consumer installment credit market, excluding credit union and government student loans, rose a very strong 8.8% during the last year.

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