Recession! What Recession? Credit Union Lending Records Being Smashed So Far in 2022

MADISON, Wis.–Credit unions are smashing records when it comes to lending so far in 2022.

In the 31 years CUNA has collected monthly data on credit union performance, Deputy Chief Advocacy Officer for Policy Analysis and Chief Economist Mike Schenk said the numbers go way beyond anything that had been forecast for this year at the end of 2021.

“The results of the data really reflect the continuation of trends we have reported. The trends are really important and in a lot of respects surprising given the volatility we see in the economy overall and the concern people have over a recession,” Schenk said.

But there’s nothing resembling a recession among credit union members when it comes to borrowing.

CUNA’s data show lending was up 2.4% in June, which as Schenk noted would represent nearly 29% growth over 2022 should the second half of the year match the first.

“That’s the fastest-ever June in 31 years,” said Schenk, noting the average for the month is around 1%.

The previous record for lending growth in any one month was May of this year, when loans were up 2.3%.

Meanwhile, overall loan growth came in at 10.2% for the first half of the year among credit unions.

A Whole Year in 6 Months

“That’s a little bit more than we thought loans would grow for the entire year when we put forecast at end of 2021,” said Schenk. “That’s the fastest first half in credit union history. The previous record was 5.9% for the first half of 1994. The interesting thing about that is in 1994 we were in almost the exact same economic position. We were coming out of a recession and inflation pressures had spiked. The Fed stepped in and began to raise rates aggressively, 330 basis points over a year…There was fear of a recession then that did not happen for three or four years after. That gives us hope looking forward that even though the Fed is raising rates we may be able to sidestep economic downturn.”

More Good News

A big driver of lending in the first half of the year were auto loans, which were up 12%, or 24% annualized. The previous record for auto loans over the first half of a year was 11.3% in 1994, according to the CUNA data, Schenk said.

“Overall, there is some really good news in monthly credit union data,” said Schenk. “We’re also seeing loan quality overall maintained. The overall delinquency rate stood at .24%, an all-time low for the fourth consecutive month.”

More detail on CUNA’s Monthly credit Union estimates can be found here.

Comments

'Tis the season for fraud! Teller questions if member fraud is suspected.

When a credit union employee suspects a member may be subject to fraud, they should initiate a careful conversation focusing on the nature of the transaction and external influences. The goal is to help the member identify red flags without the employee asking for sensitive personal information that the credit union should already have on file. Initial Verification Questions .pdf Before discussing the specifics of the suspicious activity, the employee should confirm the member's identity in accordance with established internal protocols. Questions About the Transaction/Activity If the member confirms they are conducting a suspicious transaction (e.g., a large wire transfer or purchase of gift cards ), the employee should ask questions to help the member pause and think critically: "What is the purpose of this transaction?" "Do you personally know the person or business you are sending money to?" "Have you ever met the...

Read Complete Article HERE>»

Have a Safe and Happy Thanksgiving!

Thanksgiving, is a day when we pause to give thanks for what we have! www. NCOFCU .org Have a Safe a...

Read Complete Article HERE>»

Hybrid? Work from Home? Office? The Debate Over The Ideal Work Environment Continues in CUs

The Still-to-be-Answered Question About Work By Ray Birch MADISON, Wis.—With several years’ experience now under their belts, what has turned out to be the most productive work structure for credit unions in the wake of the pandemic—return to office, work from home, hybrid? It’s a challenging question, one compounded by the fact many CUs lack objective metrics for measurement, according to one person. “As we all know, credit unions first jumped to remote work and then things came back a bit as they tried to create a work environment that as closely as possible reflected ‘normal,’” explained Lesley Sears, VP of consulting services at CUES. Sears pointed out when credit unions shut down at the b...

Read Complete Article HERE>»

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” ...

Read Complete Article HERE>»

Are You Holding Your Credit Union Back? A Directors’ Guide to Stepping Up Your Game & Staying Relevant

These are harder questions ... May Blog - Asking Some Harder Questions ...

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 . ...

Read Complete Article HERE>»

Fed cuts interest rates for the second time this year

The Federal Reserve on Wednesday lowered interest rates for the second time this year in a continued bid to prevent unemployment from surging. Fed officials voted for another quarter-point rate cut, lowering their benchmark lending rate to a range between 3.75% and 4%, the lowest in three years. It is the first time since the Fed’s rate-setting committee was established in the 1930s that officials have set monetary policy while lacking an entire month of crucial government employment data due to a government shutdown. ____________________________________ Check out NCOFCU's additional features: First Responder Credit Union Academy Podcasts YouTube Mini's Blog Job Board

Read Complete Article HERE>»

Trump Administration Reverses Course, Restores CDFI Fund Staff In Major Win for Credit Unions

WASHINGTON—In a sharp reversal of the Trump Administration’s earlier move, the mass reduction-in-force (RIF) notices issued to all employees of the CDFI Fund last month have been rescinded, according to internal emails reviewed by Punchbowl News. The notices had threatened terminations in December as part of a broader effort by the Office of Management and Budget (OMB) under Director Russ Vought to pressure congressional Democrats to drop their objections in the budget-funding fight. For the credit-union movement, the signal is loud and clear: critical community-development infrastructure may yet be preserved, sources stated. “Reinstating the entire CDFI Fund staff is an essential and welcome step toward restoring a program that has proven itself indispensable to underserved and military communities,” said DCUC Chief Advocacy Officer Jaso Stverak. “The CDFI Fund isn’t just another federal initiative—it is a lifeline for servicemembers, veterans, and low-income families who rely on miss...

Read Complete Article HERE>»

Not Your Mother’s Credit Union

“Stablecoins aren’t a speculative play. They’re the next evolution of payments — and a chance for credit unions to lead, not lag. It starts with connecting members to DLT rails - the digital wallet. Without that, nothing else can happen. It’s just a new payment rail - embrace it or lose the relationship. It’s that simple.” While ‘ stablecoins ’ were the prevailing buzzword across Money20/20 this year, the credit union industry had a significant presence. Small financial institutions have staked a place in the future of payments. Credit unions received a significant boost this summer with the enactment of the stablecoin bill into law. The Guiding and Establishing National Innovation for U.S. Stablecoins Act authorizes subsidiaries of federally insured credit unions, such as credit union service organizations, to become issuers. Not Your Mother’s Credit Union A Money20/20 fireside chat with the regulator for credit unions that I moderated focused on the rulemaking task a...

Read Complete Article HERE>»

A Preview of What Call Reports Are Likely to Reveal

By Ray Birch LAKE FOREST, Ill.—An early analysis of what call reports are likely to show this year when it comes to overdraft revenue indicates credit unions should be prepared for increased scrutiny and criticism from legislators, the media, consumer groups and, of course, the banking industry. All credit unions of more than $1 billion in assets—438 out of 4,702 CUs—will need for the first time ever to report their overdraft revenue separately this year. And when they do, data from the latest Moebs $ervices OD survey—which is based on a company poll in January of FIs’ 2023 year-end data—indicates the attention being paid to how credit unions price overdrafts and the income generated is going to heat up, according to Michael Moebs, economist and chairman of Moebs $ervices. ...

Read Complete Article HERE>»

First-responder Credit Union Newsroom

Search This Blog