FARMERS BRANCH, Texas (2/24/14)--A strong auto lending market, driven by a revitalized economy, highlighted Arkansas credit union financial results in 2013, the Cornerstone Credit Union League reported Friday.
In a sign that Arkansas's economy continues to improve, credit union loan growth in the state outpaced savings gains by a wide margin in 2013. Overall, credit union loan portfolios grew by 6.8% in the 12 months ending December 2013, while savings balances increased by 3% in the year.
The 6.8% full-year loan portfolio rise was the largest percentage gain Arkansas credit unions experienced since 2009. It also represented the first time since 2008 that annual credit union loan increases exceeded savings increases in the state.
Automobile lending continued to drive overall loan results in 2013 as improving labor markets and pent-up demand motivated more consumers to purchase vehichles. The surge in borrowing activity in Arkansas was reflected in a 24.4% full-year jump in used auto loans and a 4.8% increase in new vehicle loan balances in the year.
Credit cards and other unsecured loan balances increased by 4% and 2.6% respectively. The average rate on a platinum credit card at Arkansas credit unions was 9.12%---that is 1.81% lower than the 10.93% average at Arkansas banks.
Arkansas credit unions continued to offer better rates on loan products than state banks. The current rate on a five-year new auto loan at the state's credit unions now averages 2.15 percentage points lower than the comparable rate at the state's banking institutions according to Informa Research Services. On a five-year, $30,000 new car loan the credit union advantage saves the average Arkansas consumer over $344 per year--or more than $1,720 over the life of the loan.
Total membership in the state's credit unions jumped by 1.4% in 2013---the fastest increase since 2010. It also is more than four times higher than the 0.32% rate of state population growth in the period according to the U.S. Census Bureau.