Savings Growth Dips to Historic Low

WASHINGTON-CUNA’s Monthly Credit Union Estimates for August shows savings growth plummeting to historic lows while loan growth is charging up to pre-recession levels. Credit union saving balances fell 0.9% in August, bringing year-to-date growth to 1.6%. “We have been tracking monthly data since the late 1970s and this is the slowest eight months of the year we have ever found since we’ve been tracking savings growth in credit unions,” CUNA Chief Economist Bill Hampel said. “Compare the numbers: the monthly increase in loans in August of 1.7% is greater than the full year savings growth at 1.6% so far this year.” Regarding specific savings vehicles, certificates actually grew 1.6% for the month, but share drafts, regular shares, money market accounts, and IRAs declined 4.6%, 1.7%, 0.7%, and 0.1%, respectively. On the flip side, as Hampel pointed out, the month’s loan growth was greater than the year-to-date share growth. The dollar amount of loans outstanding was up 1.7%, according to CUNA, and 7.9% for the year. “That’s tracking to bring in probably loan growth approaching 11-maybe even 12-percent by the end of the year. So this is going to be the strongest year for loan growth going back to before the last recession back in 2000,” he commented. New vehicle loans led loan growth at a 3.3% increase. Other mortgage loans showed strong growth as well at 2.5%, as did other loans (2.3%), fixed-rate first mortgages (1.8%), and home equity loans (1.6%). Adjustable-rate first mortgages, credit cards, and used auto loans also demonstrated gains. Just unsecured personal loans were down at 0.4% during the month. Credit unions’ loan-to-share ratio jumped from 77.2% at the end of July to 79.3% for August. CUNA’s economists had met to formulate their forecast just before these numbers came out and were considering revising their forecast after seeing them, according to Hampel. Also in the report, the capital-to-asset ratio stood at 11.2% while delinquencies held steady at 0.6%, as they have for the last six months. [email protected]