Auto Balances Continue to Shrink at Credit Unions

The AmCU data showed the longest streak — at least in this century — followed the Great Recession with 12-month drops in auto loan balances for the 22 months from February 2010 to November 2011.

This streak of balance declines, which have been especially deep for new cars, has been influenced by incentives from captives and keener competition from banks.

AmCU’s monthly credit union lending estimates are pulled from Equifax data and do not include commercial loans, which now make up more than 10% of the credit union portfolio. The values also differ from NCUA data because of different collection methods, but the monthly Equifax-based data provides glimpses of trends in the months between the NCUA’s quarterly reports.

One sign of improvement for the third quarter has been coming from trends on the number of cars sold.

Cox Automotive showed new and used car sales, including fleet sales, in June were about 2.7 million vehicles, down 2.9% from a year ago. But it has seen more improvement in the past two months. July sales were 2.9 million, up 6.5% from a year ago, and August sales rose 5.2% to about three million, including its report on Monday that used car sales rose 8.1% to 1.5 million.

“Retail used-vehicle sales showed solid momentum in August, with both month-over-month and year-over-year gains pointing to resilient consumer demand,” Cox Automotive analyst Scott Vanner said. “Despite inventory challenges, the market continues to perform above expectations.”

Also, Experian showed credit unions made a small gain in market share from March to June, although banks gained even more.

And finally, the AmCU data has been showing the year-ago declines becoming smaller. The year-ago drops reached depths of 2.5% late last year, but have been narrowing since then. Balances were down 1.5% in April, but they were down only 0.8% in May and June. NCUA data showed the auto loan balance in June was $487.3 billion, down 1.5% from June 2024.

AmCU’s report showed the balance of all non-commercial loans on July 31 was 2.1% higher than a year earlier. It was up 0.3% from June, compared with the 10-year average June-to-July gain of 0.9%.

AmCU balance trends for other types of loans included:

• First mortgages rose 1.1% from a year earlier and down -0.1% from June, compared with the 10-year average up 0.9%. First mortgages were 39% of the Equifax-tracked non-commercial loans.
• Second mortgages rose 8.6% from a year earlier and 1.1% from June, compared with the 10-year average gain of 0.1%. Second mortgages were 4% of non-commercial loans.
• Home Equity Lines of Credit rose 17% from a year earlier and rose 1.9% from June, compared with the 10-year average gain of 1.2%. HELOCs were 8% of non-commercial loans.
• Secured personal loans fell 2.5% from a year earlier and rose 0.3% from June, compared with the 10-year average gain of 1.7%. Secured personal loans were 4% of non-commercial loans.
• Unsecured personal loans rose 2.8% from a year earlier and rose 0.5% from June, compared with the 10-year average gain of 1.3%. Unsecured personal loans were 5% of non-commercial loans.
• Private student loans fell 4.7% from a year earlier and fell 0.7% from June, compared with the 10-year average gain of 0.2%. Private student loans were 0.4% of non-commercial loans.

The G-19 Consumer Credit Report released by the Fed Sept. 8 showed credit unions held $86.6 billion in credit card debt on July 31, up 4.1% from a year earlier. The one-month gain was 0.8%, which was weaker than the 10-year average June-to-July gain of 1%.

Contact Jim DuPlessis at JDuPlessis@cutimes.com.