Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
CU savings rise loan growth to fall
MADISON, Wis. (5/5/09)--The credit union movement’s capital-to-asset ratio fell to 9.58% in March from 10.26% in February as credit unions recognized the costs of the Corporate Stabilization Plan, according to Steve Rick, senior economist with the Credit Union National Association (CUNA). With earnings expected to be weak and savings growth strong, the capital-to-asset ratio could fall below 9% later this year, Rick added. Credit union loans outstanding decreased 0.1% in March, but rose 0.6% for the first quarter of 2009, according to the March CUNA monthly sample of credit unions. Fixed-rate first mortgages rose 1% during March, followed by increases in adjustable-rate mortgages (0.5%), used-auto loans (0.4%), and other mortgages (0.1%). Declining in March were other loans (4.1%), home equity loans (1.1%), credit card loans (0.7%), and unsecured personal loans (0.6%).
Click to view larger image Click for larger view
Credit union savings balances grew 1.2% in March, the same rate as during March of last year. Savings growth for the first quarter of 2009 was 5.7%, compared with 5% for the same period last year. Growing in March were money market accounts (3%), regular shares (2.5%), one-year certificates (1%) and individual retirement accounts (0.7%). Share drafts declined 3.3% during March. “During the first quarter, credit union savings balances rose 5.7%, up from the 5% recorded in the first quarter of 2008,” Rick said. “U.S. households are changing their financial behavior by saving more, spending less, and trading down to less expensive substitutes. “Households’ decline in spending is reflected in credit union loan growth numbers,” he added. “For the first quarter, credit union loan balances rose 0.1%, down from 0.4% reported last year. For the full year, we expect loan growth to fall to 6%, the slowest since the 5.8% reported in 1998.” The movement’s overall capital-to-asset ratio decreased to 9.58% in March from 10.3% in February. The total dollar amount of capital ended the first quarter at $83 billion, a decrease of 6.5% from the previous month.
Click to view larger image Click for larger view
The loan-to-savings ratio decreased to 78.8% in March from 79.9% in February. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--remained at 20%. Credit union 60-+-day delinquencies were 1.54% in March, an increase from 1.48% in February. “Credit union loan quality deteriorated further in March as the overall loan delinquency rate crossed over 1.5% to reach 1.54%,” Rick said. “With the unemployment rate expected to reach double digits over the next year, the delinquency rate is expected to climb over 1.75% in 2009.”
Other Resources

RSS print
News Now LiveWire
St. Louis treasurer taps #creditunion to serve unbanked #NewsNow http://t.co/lWtcezJOej
9 hours ago
.@CUNAMutualGroup has committed $35K to @trustdotcoop over the next year to suppor the future of #creditunions.
10 hours ago
.@madison_mag gets the cooperative scoop from @SummitDoMore's @kimsponem http://t.co/RxSCeSegie
10 hours ago
.@VantageWestCU emeritus chairman Whittaker inducted into @DCUC_HQ Hall of Fame http://t.co/dpeP4ME49U
12 hours ago
Australian newspaper covers Gen Y tips from @ServusCU at @WOCCU conference http://t.co/xqmLfZVwaI
13 hours ago