Credit unions grew their balances in the first six months of 2022 at the fastest pace since CUNA began keeping records in 1991, driven by strong auto loans, the chief economist for the CUNA, Mike Schenk.
Monthly credit union estimates from CUNA showed the nation’s 5,044 credit unions held $1.42 trillion in loans, up 15.9% from a year earlier and up 2.4% compared to the previous month.
Schenk said the May-to-June gain was the fastest one-month jump since…well, May, when it was 2.3%. The previous high from May to June was 1.9% in 2004 and 1.8% in 1994.
“Loans are very strong,” Schenk said.
Credit unions held $460.7 billion in auto loans as of June 30, up 16.6% from a year earlier and 2.7% from the previous month. From December to June, auto loan balances rose 12%, breaking the previous record set in 1994, Schenk said.
Additionally, credit unions topped a third of the auto loan market for the first time in June based on a comparison of CUNA data to auto loan data for all lenders in the Credit Report. Fed’s G-19 Consumer Index released on Friday.
Banks and other lenders held $904 billion in auto loans as of June 30, up 2.8% from a year earlier and down 0.5% from March.
Credit unions’ 8.7% gain from March took their share from 31.8% in March to 33.7% in June, surpassing their previous peak of 32.6% in December 2018.
The Fed’s G-19 report showed credit cards rose 12% to $67.6 billion from a year earlier and 1.1% from a month earlier, versus an average gain of 0.7% in June.
Credit unions’ share was 6.2% in June, up 6.3% from May 2022 and June 2021.
Banks held $988.8 billion in credit card debt, up 15.5% from a year earlier and 2.5% from May. Banks’ share was 90.9% in June, compared to 90.8% in May 2022 and 90.0% in June 2021.
The CUNA report showed economies returned to more normal growth rates than double-digit gains in the first two years of the pandemic. Savings were $1.88 billion as of June 30, up 7.9% from a year earlier, and 0.1% from the previous month.
Weighted by members, the slowdown is even more apparent. Savings per member were $14,009, up 4.2% from the prior year and down -0.1% from the prior month.
While higher interest rates have improved net interest margins, they are also increasing deposit costs.
At Sikorsky Credit Union in Stratford, Conn. ($1.2 billion in assets, 56,224 members), stock and deposits were just over $1 million as of June 30, up 11.4% compared to the previous year and 2.3% compared to March 31.
On Thursday, Sikorsky announced it was raising its rates on savings accounts, money market accounts, certificates and IRAs.
“In our current economic environment, we know that financial stress is high,” said Chairman and CEO Vincent Ciambriello. “We are committed to our members and want to help them by providing financial education, loan products at great rates and savings products at premium rates to help them save more every month.”
While delinquencies rose among the Top 10 in the second quarter, CUNA estimates showed that they remained flat and low. The 60+ day default rate was 0.42% as of June 30, the same as it had been since March and down from 0.45% in June 2021.
Credit unions had 134.4 million members in June, up 3.6% from a year earlier and 0.1% from the previous month.
The CUNA report also showed:
- New auto loans rose 14.9% to $164.4 billion from a year earlier and 3.3% from a month earlier. The average May-June gain for new auto loans from 2016 to 2020 was 0.5%.
- Used car loans rose 17.6% to $296.3 billion from a year earlier and 2.4% from a month earlier, compared to an average gain of 0.9% in June.
- Unsecured consumer term loans (excluding credit cards) rose 12.3% to $60 billion from a year earlier and 3.9% from a month earlier, versus a gain average of 2.8% in June.
- First mortgages fell 1.3% to $538.7 billion from a year earlier and rose 1% from the previous month, compared to an average gain of 1.3% in June .
- Second mortgages were up 9.1% to $90.7 billion from a year earlier and 5.7% from a month earlier, compared to an average decline of 0.3% in June.