Commerce

One category of credit increases the total number of credit unions while other areas collapse

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The first mortgage loans have further supported the lending numbers of the credit unions overall, according to the latest CUNA Mutual Group “Credit unions trend report. “

The July report, mirroring May 2020 numbers, showed that in the second full month of COVID-19 economic crisis, credit unions saw loan balances grow 1%.

“Credit unions’ loan growth is projected to be around 6% this year, 2020, and that is largely due to the record highs of mortgage loans we are making this year due to these record-low interest rates,” said CUNA Mutual Group Director and Chief Das said the economist Steven Rick. “So [there’s] a big boom in fixed rate mortgage loans from credit unions. “

Every other class of credit for credit unions saw negative growth rates, according to the report. The latest figures showed vehicle loan balances rose by 2.4 billion. The number of car loans fell to its lowest level in five years, “now accounting for 32.8% of all credit unions’ balances.”

Unsecured and credit card balances are at their lowest in credit union history as they now account for 9.2% of all credit union credit balances, according to this latest report.

Rick said credit unions should expect a very healthy margin when it comes to savings. “We forecast massive growth in deposits of 17% this year, largely due to the economy checks being sent, low gasoline prices, the people who don’t spend money when they stay home and of course the volatile stock markets when people are investing their money . “Into a safe deposit product with a credit union.”

According to the report, credit unions’ savings grew at an annualized rate of 21% in May. The report says this is “the fastest pace since August 1986, the height of the savings and credit crisis”.

Rick stated that a lot could change with those numbers depending on what Congress does or doesn’t do for the next round of the stimulus laws currently under discussion.

Other highlights from the numbers reported in May were:

  • Credit unions gained 241,000 new members.
  • There are 5,369 credit unions, 37 fewer than in April.
  • The assets of the credit unions rose by 2.6%.
  • The average credit / savings ratio for credit unions fell to 76.8% from 83% in May last year.

Despite expectations that the economy will be in a depressed state for the next 18 months, Rick was optimistic. “As we have seen in the past few months, credit unions are stepping up to serve their vulnerable members in unprecedented ways and on a larger scale,” he said. “Both the member and the credit union benefit from this in the long term.”

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