Loan Growth May Plunge Off Fiscal Cliff
Industry economists agree that if the U.S. plunges off the fiscal cliff Dec. 31, credit unions probably won’t see any ill effects right away. However, even if a so-called grand bargain is reached between Democrats and Republicans, credit unions could see the loan growth momentum gained this year grind to a standstill.
Credit Union Times spoke with five industry economists, the NCUA’s John Worth, CUNA’s Mike Schenk, NAFCU’s David Carrier, the California Credit Union League’s Dwight Johnston and Catalyst Corporate FCU’s Brian Turner. NAFCU Lobbyist Brad Thaler also provided some political perspective.
Although Worth said he’s observed consumer interest in the fiscal cliff doesn’t seem as great as it was during the debt impasse, it would still impact consumers’ view of the future and result in less consumer spending and a weaker economy.
“We could get the worst of both worlds,” Worth said. “We could go over the cliff, and then get a deal next year that kicks the can down the road. We could take a hit on the economy through weaker consumer sentiment and still have any deficit benefit to show for it.”