Just a year ago, credit unions were in the midst of a 2.3%contraction within their auto loan portfolios.

Fast forward to July 2012, which showed for the first time inmore than six years, annual growth for credit union auto lending activity reached 5%, according to CUNA MutualGroup's September Credit Union Trends Report.

The second significant milestone was new vehicle portfolio growth turned positive on ayear-over-year basis for the first time in almost five years.

While new vehicle loans have increased in each of the past fivemonths, they remain $30.1 billion (33.0%) below their peak at thebeginning of 2007, the data showed.

The used vehicle portfolio growth rate continues to improve withthe 7.0% annual gain translating into a $7.4 billion portfoliogain, according to the report.

Meanwhile interest rates for new and used vehicle loans continueto fall, wrote CUNA Mutual Chief Economist Dave Colby in the analysis.

In total, vehicle loans now represent 29.2% of all credit unionloans, according to the data.

“Reports from credit union lenders across the country indicateimproving demand for all vehicle loans,” Colby said. “The questionremains: Is this just a temporary release of replacement demand oris it sustainable, provided the economy doesn't falter?”