New Figures Show a Possible Up Tick in Auto Lending; CUs Outdoing Other Lenders
ARLINGTON, Va. -- Economists in general have forecast a slowdown in consumer lending in 2007, but new figures give hope for vehicle lending, NAFCU Chief Economist Tun Wai said.
Looking at the recently released consumer installment credit figures from January, Wai said, "While revolving consumer credit increased significantly in December, the January figure indicates a general slowdown in credit card expansions after Christmas." He said to expect credit union loan growth to decline from about 7.9% in 2006 to around 6% in 2007, partly because of the general economic slowing and also the light vehicle component.
However, Wai cited data from the Center for Media Research that found 12.1% of consumers plan to buy a car in the next six months, up from the February 2006 figure of 11.8%, but down from 15.9% in February 2002.
Total consumer installment credit should grow about 4% in 2007, he said, adding that credit unions are faring better than many. "Despite the slowdown in consumer credit installment lending, credit unions still managed to outpace the growth rates of finance companies, government and Sallie Mae, savings institutions and non-financial businesses," he pointed out.
The loans federally insured credit unions already have on the books are looking good to. Wai highlighted that delinquencies have steadily declined from 0.79% in 2002 to 0.68% in 2006. Real estate delinquencies, those over one month, are up among federally insured credit unions just slightly from 0.91% in 2002 to 0.99% in 2006. Net charge-offs have dropped from 0.51% in 2002 to 0.41% last year. Charge-offs due to bankruptcies are down from 39% to 24%.