The slowdown of savings growth at credit unions may be attributed to members wanting to pay down their high-cost debt first.
It's one of the factors mentioned in CUNA Mutual Group's June "Credit Union Trends Report," which tracked figures through April. According to the data, on a year-to-date basis, savings were up 3.3% but far below the 7.1% gain for the same period in 2009. Overall, savings growth stood at 6.5% for the industry as of April.
Besides members paying down debt, some CUs are deterring deposit inflows with intentionally low rates in hopes of managing their capital ratios, wrote Dave Colby, chief economist at CUNA Mutual, in the report. Low yields have also inhibited growth, he added. The bulk of savings gains over the past year were attributable to money market accounts, regular shares and share drafts, the data showed.
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