Credit Unions Continue to Grow Consumer Loan Portfolios Faster Than Banks

Meanwhile, balances continued to shrink at banks.

Banks held $1167.9 billion in credit card debt on Aug. 31, down 2.8% from a year earlier. It was unchanged from July, compared with the average July-to-August gain of 1%. Banks’ share of credit card debt was 91.9% in August, down from 92.2% a year earlier and unchanged from July.

Credit card balances at banks have been shrinking since last December, and drop from a year earlier was 2% to 3% in the second quarter.

The Fed’s quarterly survey of about 80 banks showed most reported they tightened lending standards in the second quarter for credit cards, while leaving them unchanged for auto and other consumer loans. Many raised minimum credit score requirements, tightened credit limits, and a lowed the extent to which loans were granted to customers that did not meet credit scoring thresholds.

“In contrast, most queried terms for auto loans and all queried terms for other consumer loans remained basically unchanged,” the Fed reported.

Credit unions also fared better than banks with consumer term loans, a broad basket that includes auto loans, boat loans, personal loans and private student loans.

Credit unions held $639.1 billion in non-revolving consumer loans on Aug. 31, up 11.6% from a year earlier. The gain was 0.3% from July to August — slower than the 10-year average gain of 0.7%.

Banks held $830.6 billion in non-revolving consumer debt on Aug. 31, down 7.2% from a year earlier. The gain from July was 0.7% — slightly better than the 10-year average gain of 0.6%.

The Fed revised credit card balances downward by less than 50 basis points from April through July for credit unions.

One result was that the balance of $86.2 billion now reported for July had previously been reported at $86.5 billion, which is now the balance for August.

Contact Jim DuPlessis at JDuPlessis@cutimes.com.