ALEXANDRIA, Va. – NCUA’s mid-year stats show CUs are being inundated with deposits, while lending has slowed considerably – and oh by the way, credit unions are nearing the $500 billion asset milestone. With deposits jumping by 9.7% in the first half of 2001, and loans inching along at just a 2.8% increase, the industry’s statistical snapshot is the antithesis of last year’s lending bonanza and deposit drought. “The liquidity concerns that were evident last year, have largely abated. The challenge now is getting loans out the door,” said Mike Schenk, VP of economics and statistics for CUNA. With deposits on the rise, and lending slowing, it’s no surprise that credit unions have put more of their money into investments. Investments jumped by 11.4% during the first half of 2001 to a total of $99 billion. This is one of the reasons the asset sizes of corporate CUs have ballooned this year, with there now being 14 corporates with over $1 billion in assets. Schenk said that margins at CUs are tightening. Credit unions that want to slow the tightening will have to reprice deposit accounts downward, which they have been reluctant to do. Schenk said going forward growth in deposits is going to come from regular shares, because the difference in rates between shares and certificates is pretty nominal right now. NAFCU economist Tun Wai said the stock market effect is more pronounced than ever these days. When the market was booming a few years ago, CUs were scrounging for deposits, but this year’s stock market decline has ignited deposits. “I think it’s amazing how many people are participating in the stock market today. These people are generally more savvy about their portfolios. When they go down, they get concerned,” said Wai. Concerned to a point where many flock to the safety of deposit institution accounts, where CUs often have an edge because of their higher rates. The loan-to-share ratio, which eclipsed 80% at one point last year, has fallen to 74.5%. Auto loans, the bread and butter of the average CU’s loan portfolio, saw minuscule increases. Used autos grew by 4.8% to $62.9 billion, while new autos grew at an anemic 0.7% to $61 billion. Credit card loans were down 4.3%, dropping to $20.7 billion. Schenk said CUs are losing big chunks of their card portfolios to consumers refinancing their mortgages and adding their credit card debt onto their new mortgage. “Since only 45% of credit unions offer mortgages, members are going outside the system to refinance and they’re taking their credit card debt with them,” said Schenk. Continuing a trend of recent years, mortgage loans led the loan growth at credit unions. First mortgages were up 6.7%. Wai said in this environment CUs should look down the line when making any pricing decisions. “If you’re making pricing adjustments today, don’t look where you are currently, look where you will be six months from now. Ask why the liquidity is here, and is it going to stick around,” said Wai. With assets at $477.2 billion and number of members at 78.7 million, the industry is poised to reach the $500 billion mark by year-end and is closing in on the 80 million member milestone. Some of the most eye-catching of NCUA’s mid-year stats come from the World Wide Web. There are now 4,143 federally-insured CUs with Web sites, an 8.9% increase over year-end 2000. These sites aren’t just brochureware – 2,659 of them offer electronic financial services such as home banking, a 15.7% jump over year-end 2000. Approximately 7.5 million members engaged in CU transactions over the Web. [email protected]

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