MADISON, Wis. — While early indicators showed member business lending demand slowing down, the latest data indicates the loan category is up 12% over the past year and accounts for 7.3% of all loan growth.
That's according to CUNA Mutual Group's June Credit Union Trends Report citing data from CUNA economics and statistics. Thanks to a 1.3% gain in June, total loans reached $566 billion, said Dave Colby, chief economist at CUNA Mutual. Through the first half of 2008, total loans are up 4.1% versus a 2.4% increase for the same period in 2007.
Year to date, real estate secured loans have accounted for 103% of the total increase with 89% of the gain attributable to first mortgages, Colby noted. However, the outlook for lending on new purchases continues to look weak, he added.
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"Credit unions need to aggressively pursue members with existing debt who will benefit from more favorable terms at their credit union," Colby said. "Credit union lending results are exceptional given the economic environment and are outperforming our forecast. Final year-end 2008 results will be driven by first mortgage retention strategies and will most likely drift lower."
Consistent signs on recovery may not be seen until the end of the first quarter in 2009, Colby said, adding the housing correction and credit crisis will stick around at least until the end of the year.
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