Total loans at credit unions are up 1% year to date, mirroring the same pace for member business loans.
Credit unions choosing to sell more first mortgages coupled with a weak economy are the two main drivers for the small increase, according to CUNA Mutual Group's September Credit Union Trends Report. The 1% rise amounted to a $5.8 billion increase for all loans year to date and 3.5% or $19.7 billion over the past year.
The strongest gains have come from home equity loans, fixed rate first mortgages and used car loans, according to the report. Adjustable rate first mortgages, second mortgages and new car loans posted the largest declines. Member business loans are up just 1% year to date.
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CUNA Mutual Chief Economist Dave Colby said looking forward to the rest of the year and into 2010, credit unions may continue to see a "sluggish loan growth trend."
"Consumers will be engaged in balance sheet repair until employment conditions improve," Colby noted in the report, adding strong first mortgage origination activity will be strong but credit unions will keep on selling loans due to historically low yields on long-term fixed-rate assets.
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