Consumer Lending Growth Drives Credit Union Balance Sheet

Auto and credit card loans lead the way.

As credit unions adjust to the rapidly shifting mortgage market, they are increasingly shoring up their balance sheets with more consumer lending, according to Callahan & Associates first quarter 2014 data in Trendwatch.

Total loan originations are down compared to a year ago. This is because first mortgage activity has slowed down and refinancing volume declines.

Despite this, consumer loan originations grew 10.5% year over year, from $43.5 billion to $48.1 billion, nearly doubling all other originations.

ytd Loan Origination Breakdown
Data As of March 31, 2014
Callahan & Associates |


Source: Callahan & Associates Peer-to-Peer Analytics

Two areas were the primary drivers of consumer lending growth: credit cards.

Year over year, both new and used auto loan balances had remarkable growth, at 14.7% and 12.1% respectively. The growth for new car loan balance is particularly good news, indicating that members are turning to credit unions as new car sales strengthen in a recovering economy.

auto loan portfolio Breakdown
Data As of March 31, 2014
Callahan & Associates |


Source: Callahan & Associates Peer-to-Peer Analytics

Together, new and used auto lending grew at a 12.3% clip, the largest figure since the recession and part of a steady trend stretching back to 2011.

With auto loans a core credit union product, auto balance growth is reaching stratospheric heights in some states. Rhode Island, Idaho, and Arkansas all posted greater than 20% auto growth year over year 33.8%, 23.9%, and 21.2% respectively while the other states in the top five, Florida at 19.5% and Arizona at 18.4%, nearly reached that threshold.

Although less robust than auto growth, credit card loans grew 7.9% as of March 31, higher than the 6.8% increase for 2013. Part of this performance can be attributed to the boost in active credit card accounts over the past two years, when two million accounts were added to credit union balance sheets for a total of nearly 16 million accounts, corresponding to $42 billion in outstanding credit card loans. Unused credit card lines, however, continue to grow as well, up 17% from first quarter 2012 to total $90.5 billion.

North Carolina and Idaho lead the field for 12-month credit card balance growth, with both states reporting 23% and 19.3% respectively. Rounding out the top five are Vermont (14.5%), Virginia (12.6%), and Indiana (12.1%).

Further good news can been seen in credit union delinquencies and charge-offs. As of first quarter 2014, the 0.81% and 0.50% rates for total delinquencies and charge-offs are the lowest totals since first quarter 2008 and well below their peak in first quarter 2010 when those statistics totaled 1.83% and 1.22% respectively.

May 29, 2014

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