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CU System
CU loans still growing delinquencies level off in July
MADISON, Wis. (9/3/08)--Credit union loans grew and delinquencies leveled off in July--indicating credit unions are faring well in the credit quality crisis.
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The dollar amount of credit union loans outstanding grew 1.2% in July, compared with 0.9% for the same period in 2007, according to the Credit Union National Association (CUNA) monthly sample of credit unions. Other loans (3.7%) and adjustable-rate first mortgages (2.4%) reflected the highest monthly percentage increases, followed by used-auto loans (1.3%), home equity loans (1.2%), and credit cards (1%). Credit union savings balances declined 0.5% in July 2008, compared with a 1.1% decrease in July 2007.
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“As banks tighten their lending underwriting standards, credit unions are picking up market share,” Steve Rick, CUNA senior economist, told News Now. “Credit union loan balances rose 5.3% in the first seven months of 2008, up from 3.3% in the similar period last year. Growth in the fixed-rate mortgage portfolio continues to lead the way with an increase of 0.8% in July and 14% year-to-date.” Money market accounts rose 0.7%, while regular shares, certificates and share drafts declined 1.7%, 0.4% and 0.4%, respectively. With loan growth outpacing savings growth, the loan-to-savings ratio increased to 83% in July from 82% in June. The liquidity ratio--the ratio of surplus finds maturing in less than one year to borrowings plus other liabilities--decreased to 15.6% in July from 17.4% in June. Regarding asset quality, credit unions’ 60-plus-day delinquencies have remained at 1% for the past seven months. “The overall credit union loan delinquency rate appears to have leveled off around 1.05% over the past couple of months, a hopeful sign that the credit quality crisis infecting other lenders is not having a significant negative impact on credit union balance sheets,” Rick said. The movement’s overall capital-to-asset ratio is 11%. The total dollar amount of capital remains at $90 billion.
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