Credit union lending exceeds deposits for first time since 2008

Callahan & AssociatesRecent data from an analysis of credit union performance by Callahan & Associates showed a surge in lending during the first half of the year, marking the first time since 2008 that loan growth has exceeded deposit growth.

Over the past year, the $621 billion credit union loan portfolio expanded by 5.4 percent, the fastest pace in five years and ahead of the 4.6 percent share growth rate.

During the first half of the year, credit union lending activity posted record numbers, with $175.1 billion in loans originated—or $1 billion per day. Six states have recorded at least a 20 percent increase in loan originations, with North Dakota leading with a 37.6 percent increase.

Consumer lending has helped to spur growth, and new auto loans are the fastest growing component of the credit union industry’s loan portfolio. New auto loan balances have increased 11.2 percent over the past year, and used auto lending also remains strong. Credit union credit card balances topped $40 billion for the first time mid-year.

Real estate lending has also been on the rise, with a record $34.9 billion in home loans originated during the second quarter. Credit unions originated 6.8 percent of all first mortgages in the U.S. during the first half of the year, and home equity loan originations have increased 10 percent from last year.

“Consecutive years of record lending activity are evident in the loan portfolio growth,” Callahan & Associates Executive Vice President Jay Johnson said. “Every loan category in the portfolio is growing at a faster rate in 2013 than in 2012. Credit unions continue to build on the momentum developed during the downturn when they were lending to members at a then-record pace during the height of the ‘credit crunch’.”

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