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CU System
CU loan growth fastest since 2005, MCUE survey reveals
MADISON, Wis. (7/3/14)--Credit union loan portfolios jumped 1.2% in May, the most significant monthly increase in nine years, according to the Credit Union National Association's monthly sample of credit unions.
 
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The last time overall loan growth exceeded May's pace was August 2005. 
 
"Importantly, the increases were seen across the entire loan portfolio,"  Mike Schenk, CUNA's interim chief economist, told News Now .
 
New auto loans led loan growth, rising 2.6%, followed by used-auto loans (1.6%), unsecured personal loans (1.2%), home equity loans (1.3%), adjustable-rate mortgages (1%), credit card loans (0.9%) and fixed-rate first mortgages (0.1%).
 
"The U.S. economy floundered a bit recently--with a nearly 3% contraction in overall growth in the first quarter," Schenk said. "But we view the weakness as temporary--largely reflecting the lingering effects of the government shutdown/furloughs late in 2013 and, more importantly, a brutal winter across much of the United States. The loan growth were now seeing confirms our view that a second-quarter rebound is on the horizon.
 
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"Low market interest rates, combined with a tremendous amount of pent-up demand, means we can expect more borrowing and lending during the summer months," Schenk added. "That, of course, should help to boost credit union bottom-line results as lower-yielding investments are replaced with higher-yielding loans."
 
Credit union savings balances grew 1% in May compared with a 0.5% decrease in April. Share drafts (5.0%), regular shares (0.8%), and money market accounts (0.5%) increased during May. On the decline were one-year certificates (0.4%) and individual retirement accounts (0.2%).
 
Total credit union membership grew 0.3% during May for a total of 99.9 million as credit unions prepare to reach the 100 million membership milestone.
 
The net capital-to-asset ratio held steady at 10.5% during May while the loan delinquency rate fell to 0.8% of loans outstanding.
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