Credit unions show momentum in auto loans

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Credit union auto loan portfolios in May posted their largest month-over-month increase since May 2018, ending a string of poor results.

CUNA’s monthly credit union estimates released this week showed credit unions held a total of $ 392.8 billion in auto loans as of May 31, up 1.2% from April to May, their strongest performance since May 2018, when growth was 1.8%.

Compared to a year earlier, auto loans increased 3.9%, compared to a gain of 0.9% from May 2019 to May 2020, reflecting the impact of the COVID-19 pandemic.

Most of the muscle in the car came from used vehicles. Their loan balances increased 1.3% from April to May (also the best since May 2018, when they increased 1.6%).

New cars also helped by shattering a series of month-to-month sales declines. They rose 0.8% from April to May, their best month-over-month gain since May 2020, when they rose 1.1%.

The month also showed other notable changes.

In the event that a negative might be positive, savings fell 0.5% from April to May, the first drop since December 2019 in the pre-COVID-19 era. Members feverishly started saving after COVID-19 was declared a pandemic in March 2020, which economists say is usually a signal of a recession.

The fall in savings has made it possible to improve the loan / savings ratio. It was 69.5% as of May 31, up 92 basis points from April – the first month-over-month improvement since November 2020.

Real estate growth slowed from the record pace of 2020, but remained strong. Credit unions held $ 538.2 billion in first mortgage loans as of May 31, up 8.9% from May 2020 and 0.6% from April.

Among all lenders, the latest Mortgage Bankers Association forecast showed first mortgage balances increased 4.8% in the 12 months ending March 31 and 5.2% for the second quarter. .

With the improvement in auto credit and the evolution of savings, have credit card balances ended their pandemic spiral? The response will have to wait until 3 p.m. Thursday, when the Fed releases its G-19 consumer credit report.

Meanwhile, the CUNA report also showed that the country’s 5,233 credit unions had 128.7 million members as of May 31, 3.5 percent more than a year earlier. The report also showed:

  • Total loans increased 4.5% to $ 1.21 trillion as of May 31. A year earlier, from May 2019 to May 2020, loans increased by 7.1%.
  • Assets rose 14.5% to $ 2.03 trillion as of May 31. A year earlier, assets grew 14.7%.
  • Savings rose 16.2% to $ 1.74 trillion as of May 31. A year earlier, savings increased by 15%.
  • Capital increased 7.3% to reach $ 199.3 billion as of May 31. A year earlier, the capital increased by 9.2%.
  • Loans per member increased 1% to $ 9,419 as of May 31. A year earlier, they had risen 3.6%.
  • Savings per member increased 12.3% to $ 13,548 as of May 31. A year earlier, they had increased by 11.2%.
  • Fixed rate first mortgages increased 12% to $ 419.4 billion.
  • First variable rate mortgages fell 0.6% to $ 118.8 billion.
  • Second mortgages fell 13.5% to $ 29.1 billion.
  • Home equity lines of credit fell 5.9% to $ 54.5 billion.

About Galen A. Williams

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