Auto loan portfolios accountedfor nearly half of all credit union loan growth in 2013.

Indeed, over the past year, auto loan portfolio expansion of$19.7 billion accounted for 48% of lending, according to CUNAMutual Group's Credit Union Trends Report, which trackeddata through September.

Vehicle loans represented 30.7% of all credit union loans, upfrom a low of 28.7% at the end of 2011 but below the pre-recessionlevel of 33.3%.

Dave Colby, chief economist at CUNA Mutual Group, seesconsiderable momentum in lending heading into 2014.

“Vehicle lending growth is forecast to remain strong, based onsales forecasts and the growing need for replacement transportationgiven the record average age of the existing vehicle fleet,” Colbynoted.

In addition to purchase financing for new and used vehicles,Colby said he sees other opportunities in vehicle loan recapture,including pricing vehicle loans not only on cost-of-funds andmarket competition, but also expected returns versus theirinvestment alternatives.

Extending credit and managing risk to the recentlycredit-impaired, where some consumers had good history but theircredit scores were dinged by the prolonged economic downturn, couldalso open up more auto lending prospects for credit unions, Colbysaid. Finally, more members are joining, which widens that revenuespace even more.

“We are cautiously optimistic for overall system loan growthresults in 2014 and very optimistic for credit unions (that) pursuean aggressive member lending strategy,” Colby said. “Overalleconomic improvements, improving credit quality and an expandingmembership base will allow credit unions to carry 2013's momentumwell into 2014.”

The surge in auto loans continues to be a national phenomenon.Buoyed by a drop in delinquent loans, auto loan balances reached anall-time high in the third quarter at $782.9 billion, according toExperian Automotive. That figure was up $103 billion from the thirdquarter in 2012, data from Experian's latest State of theAutomotive Finance Market report showed.

“The availability of credit, combined with consumers' continuedstrong performance repaying their loans, has a positive spiraleffect,” said Melinda Zabritski, senior director of automotivelending for Experian Automotive. “It allows lenders to slowly butsurely take on additional risk while providing more access to loansand paving the way for higher auto sales.”