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ARLINGTON, Va.-Indirect lending can be a boon to credit unions when done right. That’s the message NAFCU, as well as NCUA has been trying to spread. In May, credit unions grew their non-revolving market share to 14.8% from 14.5% at the end of 2004. Though the increase as a percentage does not seem all that significant, NAFCU Senior Staff Economist Jeff Taylor admitted, the amount is also increasing. The competition from the captives is also noteworthy when considering the growth, he said. “Some are growing auto loans without indirect lending, but that’s the exception rather than the rule,” Taylor added. For the month of May, total credit union consumer debt increased $2 billion to $219 billion. Non-revolving credit comprised $1.8 billion of that growth, bringing credit unions’ non-revolving lending to $196.1 billion. Not all of that is indirect auto lending, Taylor said, but “I would say (it is) a large majority of it.” He made an educated guess that about 90% of the non-revolving loans were for autos and about 75% of those could be indirect. According to data from Callahan & Associates, credit unions made 17.6% of all auto loans in May, the highest rate since August 2004. America First Federal Credit Union in Utah, Portland Teachers Credit Union in Oregon, and BECU (Boeing Employees Credit Union) in Washington were the largest auto lenders in their states. Though the prime rate has increased as the Federal Reserve has raised the funds rate, there would have to be “a real spike” before you see a drop off, Taylor stated. [email protected]

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