Credit unions see lending increases in second quarter

Debbie Matz

Data submitted to and compiled by the National Credit Union Administration revealed that federally insured credit unions continued to perform well into the second quarter of 2012 ending June 30.

Membership increased by almost 645,000, setting a record high for the industry. Total savings also increased, though the number of credit unions declined.

Additionally, credit unions increased lending by 1.7 percent in the second quarter, which was the fifth consecutive quarter to see lending increases. Loans for used and new auto loans rose by 2.8 percent and loans for first mortgages increased by 1.7 percent.

“Lending is the investment needed to support a recovering economy,” Debbie Matz, the board chairwoman of the NCUA, said. “So, the largest quarterly increase since the fall of 2008 demonstrates that credit unions are playing an important role in efforts to create jobs, stimulate small businesses and revitalize communities. The credit union industry’s performance further strengthened in almost every category. Assets, earnings and net worth rose, as charge-offs, bankruptcy filings and loan loss reserves declined. Credit unions continued to add a significant number of members and now serve more than 93 million Americans.”

Total assets of credit unions also increased by $5.9 billion in the second quarter. Extra fee income and other revenue, accompanied by decreases in interest and loan expenses, led to an increased quarterly net income.

The industry’s delinquency ratio also saw an improvement, likely resulting from the implementation of an NCUA rule that allows credit unions to modify loans without having to classify a debt restructuring as delinquent until the institution receives payment over a six-month period. The percentage of loans charged off due to bankruptcy, however, increased by 0.6 percent.

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