Skip to main content

Ongoing Rate Increases Have Not Only Not Slowed Member Borrowing (Yet), Pace Has Picked Up

MADISON, Wis.–Not only have ongoing rate increases by the Federal Reserve not slowed down member borrowing, it actually picked up pace through September, according to CUNA’s latest Monthly Credit Union Estimates. But the slowdown is coming, said one economist.

SchenkMike

Mike Schenk

“In general, the trends we see are continuations of what we have reported in the recent past,” said CUNA’s chief economist, Mike Schenk. “Despite a very aggressive Federal Reserve,  loan growth actually accelerated for third month in a row, increasing 2.1%. That’s the third month of loan growth over 2%. We have never seen a calendar year where we have had three months of loan growth like that.”

Lending at credit unions grew almost 16.5% year-to-date through September, which is on pace for 22% growth in 2022, which would set another record, according to Schenk.

Loan-to-Share Ratio Hitting High Marks

On the other side of the balance sheet, Schenk said the latest data show savings were up 4.2% in September and are on pace for 6% growth on an annualized basis.

As a result, the industry’s loan-to-share ratio was 79%, up from 71% pre-pandemic and above the long-term average of 72%. “There is not a lot of liquidity; liquidity is tightening very significantly,” Schenk said. “Despite some challenges to credit unions from what we can tell, there are no real issues. But liquidity will be a front and center issue going forward.”

The good news, said Schenk, is the credit union delinquency rate remains steady and near all-time lows.

In addition, he said memberships was up 4.1% in September, compared to population growth of .5%.

“There is a lot of good news in the data,” said Schenk. “But we expect with additional Federal Reserve aggressive interest rate moves that that strong loan growth will be tapering off.”

CUToday

Comments

Post a Comment

Please no profanity or political comments.

Popular posts from this blog

Both Sides of The Desk!

With over 50 years of experience in the credit union sector, I have had the privilege of observing and participating in its evolution from various vantage points. My journey has taken me from serving as a dedicated volunteer holding critical leadership roles, including serving on the supervisory committee, as director, and as board chairman, culminating in my tenure as CEO for 12 years and now founder and President/CEO of the National Council of Firefighter Credit Unions . This extensive background has enabled me to " Sit On Both Sides Of The Desk ," blending operational expertise with strategic oversight. In this blog post, I want to share how this dual perspective has enriched my understanding of credit union dynamics and fostered more effective governance. By leveraging the insights gained from years spent navigating both the intricacies of daily operations and the broader strategic objectives, I have witnessed firsthand the transformative power of collaboration, communi...
Post a Comment
Read Complete Article HERE>»

Unlocking the Power of Emeritus Board Positions in Credit Unions

  Explore how the Emeritus Board Position in credit unions honors long-serving members, offering them a chance to mentor new leaders while maintaining strategic influence without the responsibilities of active board roles.
Post a Comment
Read Complete Article HERE>»

How To Make Decisions With Conviction—Even Under Pressure

Why strong leaders act when others hesitate — and how to develop that confidence without needing every answer. I’ve watched smart, experienced leaders freeze. And I’ve been in that same position myself. It’s not because we lack information, but because we don’t feel ready to choose. Leaders often get stuck because they’re waiting for the perfect moment to act. They’re thinking through the consequences, weighing the trade-offs, trying to get it right. But the longer they wait, the harder it becomes to move at all. The truth is that the worst decision isn’t always the wrong one. It’s the one you never make. If you’re in a leadership role, you don’t always get the luxury of knowing. You have to move anyway. Not recklessly, not blindly, but with clarity, purpose and conviction. In high-pressure moments, the gap between average leaders and great ones gets exposed. It’s not a gap in intelligence or experience. It’s a gap in decisiveness. Because conviction doesn’t mean certainty—it means mak...
Post a Comment
Read Complete Article HERE>»

Fed Kicks Off Two-Days of Meetings Today as Critics, Proponents Respond to Rate Increases; Plus, What CUs Should Expect

CUToday WASHINGTON–The Federal Reserve’s Open Market Committee (FOMC) will kick off two days of meetings today and the decision they announce tomorrow will affect everything from the major U.S. markets to credit unions that are seeing strong loan growth to individual credit union members struggling with monthly bills. The FOMC is widely expected to again raise its benchmark rate as it seeks to cool raging inflation. Among those expecting rates to be higher by Wednesday afternoon is CUNA’s chief economist, Mike Schenk, who expects the Fed will push up rates by 75 basis points. That follows the full one percentage point increase made during the Fed’s July meeting. “That’s pretty substantial, but inflation is over 9%,” said Schenk...
Post a Comment
Read Complete Article HERE>»

Live - Podcast Understanding The Importance P&L Statements

A Weekly Dose of Innovation for Credit Unions Serving First Responders Welcome to the NCOFCU Podcast: Your Weekly Dose of Innovation. Hosted by Grant Sheehan CCUE | CCUP | CEO, NCOFCU, this podcast is your definitive source for the latest news, insights, and trends in the first responder credit union world.
Post a Comment
Read Complete Article HERE>»