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Credit unions ended 2020 with their slowest loan growth in more than five years, with continued weakness in auto lending and credit card usage compounded by slower real estate growth, according to reports released Friday.

CUNA’s monthly credit union estimates showed credit unions had total loans of $ 1.19 trillion as of December 31, up 5% from the previous year.

CUNA Chief Economist Mike Schenk said the last time loan growth was this weak was around 2012. “At that point we were limping out of the Great Recession.

It wasn’t the only record that Schenk noticed. Savings rose 20.6% to $ 1.62 trillion, contributing to a loan-to-share ratio that fell to 73.6%, the lowest level since March 2015 and down from 84 , 2% in December 2019.

“A low loan-to-equity ratio is arguably good in the midst of an economic crisis because then you can meet your demand for cash,” Schenk said. “On the other hand, there are income implications associated with a very low loan-to-equity ratio, especially in an environment where investments return very close to zero.”

Membership grew 3.1 percent to 126.6 million, meaning the membership of credit unions was growing seven times faster than population growth, he said.

First mortgage loan balances of credit unions increased 11.1% to $ 524 billion as of December 31. The Mortgage Bankers Association estimated that all lenders’ balances rose 4.3% to $ 11.1 trillion last year.

Mortgages continued to be the main source of growth for the credit union portfolio, but the size of the gains has been declining since July.

“Our expectation this year is that there will be a drop in mortgage lending because there will be a dramatic drop in refinancing,” Schenk said.

While spring typically brings a surge in home sales, Schenk said the continued spread of COVID-19 and questions about vaccine effectiveness on variants could also dampen the growth in purchase mortgages this season. .

The Fed’s G-19 consumer credit report showed that bank and credit union credit card portfolios posted seasonal gains in December, but not as strong as in previous years. And overall portfolios have remained lower than balances from a year ago.

This month’s report also included the Fed’s quarterly report on auto loans for all lenders, which stood at $ 1.23 trillion on Dec.31, up 3.5% from the previous year. ‘last year. Growth was 3.9% from December 2018 to December 2019.

The CUNA report showed that the total auto loan portfolio of credit unions declined slightly from November to December, the first time it declined since April and May, when the pandemic’s declining peaks hit. feel.

But the weakness in auto loans had started long before the pandemic. Growth rates began to decline in the fall of 2018, and month-over-month declines occurred from September to October 2019 and from January to February 2020.

Credit unions generally fared worse with new car loans last year, but from November to December the used car portfolio fell 0.3%, the first drop in a year. month to month since April.

Overall, new car loans ended the year at $ 144.1 billion, down 3.7% from the previous year. Used car loans increased 4% to $ 240.5 billion.

The results were weaker for credit unions with auto portfolios of less than $ 2 billion, meaning all but the top 15 auto lenders from credit unions.

A CU time Analysis of NCUA appeals reports found that the top 15 auto lenders held $ 67 billion in auto loans as of Dec.31, up 7.5% from the previous year. New car loans rose only 1.3% to $ 27.7 billion, while used car loans rose 12.4% to $ 39.3 billion.

Results varied widely among the top 15 auto lenders, which together own nearly 20% of the membership and assets of U.S. credit unions.

Gains of over 20% in total car portfolios occurred at the Navy Federal Credit Union of Vienna, Va. ($ 135.7 billion in assets, 9.9 million members) and SchoolsFirst Federal Credit Union of Santa Ana, Calif. ($ 23.7 billion in assets, $ 1.1 million members).

But overall declines occurred at three:

  1. BECU, Tukwila, Wash. ($ 26.8 billion in assets, 1.3 million members), where new car loans fell 9.8% to $ 1.8 billion, while used car loans fell fell 6.3% to $ 817.3 million.
  2. Security Service Federal Credit Union, San Antonio ($ 9.8 billion in assets, 803,514 members), where new car loans fell 10% to $ 1.9 billion, while car loans fell 10% to $ 1.9 billion opportunity fell 7.5% to $ 2.2 billion.
  3. Golden 1 Credit Union, Sacramento, Calif. ($ 16.3 billion in assets, 1.1 million members), where new car loans fell 9.4% to $ 2.2 billion, while used car loans rose 3.9% to $ 2 billion.

The CUNA report also found that the number of credit unions fell to 5,298 in December, from 5,302 in November and 5,460 in December 2019. Other 12-month changes include:

  • Fixed rate first mortgages increased 14.2% to $ 401.3 billion.
  • First variable rate mortgages increased 2.1% to $ 122.7 billion.
  • Second mortgages fell 15.3% to $ 29.8 billion.
  • Home equity lines of credit fell 3.2% to $ 56 billion.
  • Loans per member increased 1.9% to $ 9,406.
  • Savings per member increased 16.9% to $ 12,786.