WASHINGTON — Credit union savings grew faster than loans for the month of September, according to CUNA, but the question remains whether this is an anomaly or the start of a trend.
"What we've been tracking all year is where the savings growth is and it has been somewhere else," CUNA Chief Economist Bill Hampel said. "Actually, consumers just haven't been saving and finally in September we had some savings growth in credit unions."
Savings balances increased 1.4%, according to Monthly Credit Union Estimates. Hampel highlighted that savings growth for September was close to the entire rest of the year. Credit union savings was up just over $19 billion in the first nine months. A little over $10 billion occurred through August, while the remaining $9 billion came in September.
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"We've been waiting on some evidence of return to savings behavior by consumers because they haven't been doing much of it for the past two years–not just at credit unions but anywhere," he said. However, he cautioned, this is just one month; check over the next couple of months to see if growth continues but, Hampel said, this could be a "turning point."
Certificates drove savings growth in September at 3.6%, while share drafts were up 2.8% and individual retirement accounts were up 1%. Money markets, which had driven savings over the last couple of years according to Hampel, were down 0.3%.
He pointed out, "What's strange is that almost half of our savings growth has happened in the second half of the year. Historically, the vast bulk of savings growth happens in the first five or six months of the year."
Loans were up 0.8% for the month, which Hampel described as "OK…nothing to write home about." Much of the lending growth was in "other mortgage loans" (4.5%). Adjustable-rate first mortgages were up 1.9%, credit cards were up 1.3% and fixed-rate first mortgages were up 1.9%. New car loans and home equity loans also experienced some growth while unsecured loans and "other loans" were down slightly.
This activity dropped the loan-to-share ratio down from 83% in August to 82.5% for September. Still, the average capital-to-asset ratio remained strong at 11.3% in September, down slightly from 11.4% in August. Delinquencies also held steady at 0.6% for the month. –[email protected]
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