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CU System
Loans surge at CUs, CUNA monthly report says
MADISON, Wis. (5/5/14)--Credit unions experienced a "surprisingly" strong surge of lending activity in March, according to the Credit Union National Association monthly credit union estimates.
 
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"We're surprised on the upside," said CUNA Senior Economist Steve Rick. "Year-over-year loans were up 8.5%, and in March we had forecasted about 7.5%."
 
Loans outstanding increased 0.7% in March to a total $669.3 billion, and year-to-date loan growth was 1.4%--"way better than anything we've seen in the past five years," he told News Now. In 2010, year-to-date loan growth was -1.4%, rising to 0% in March 2012.
 
"It's really good for credit unions' bottom line and net income because there is less money sitting in lower-yield investments," he said.
 
Fixed-rate first mortgages led the way at 2.3%, followed by new auto loans at 1.8% and used auto loans at 1.1%. Adjustable-rate mortgages and unsecured personal loans ticked downward at -2.1% and -1.2%, respectively.
 
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"Usually the first quarter is not big for loan growth because people are usually paying down debt after the holidays," Rick said.
 
However, a recovering labor market tips the scales in favor of consumer confidence, he said. The U.S. Department of Labor reported an addition of 288,000 jobs in March (See related story: April job adds, slimmer unemployment may not tell whole story.)
 
With savings up 3.8% year-over-year and 0.4% from February, "both sides of the balance sheets are strong," Rick noted. March 2013 savings balances stand at $964.4 billion compared with $929.3 billion one year prior.
 
"Overall, we may have to revise up our credit union earnings forecast," he said.
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