Credit unions are pulling back from auto lending, but whether that signals trouble or strategic discipline remains an open question, according to a discussion during Thursday's Inside the PRO Studio webcast.
Senior reporter Jim DuPlessis with CU Times said the industry's declining market share, which fell to 19.6% in the fourth quarter of 2025, reflects a combination of factors, including increased competition from banks and a more cautious approach by credit unions themselves.
"I think it's a bit of both," DuPlessis said, describing the shift as both a "strategic retreat" and evidence that credit unions are being outpaced in some areas.
The discussion pointed to decisions made during the 2022–2023 lending boom, when some credit unions priced loans well below market rates, boosting volume but weakening long-term performance. That period, combined with inflated vehicle values, contributed to rising delinquencies and charge-offs now exceeding pre-pandemic levels.
At the same time, some institutions are intentionally rebalancing portfolios. DuPlessis cited one credit union that reduced auto exposure from 34% to 28% while expanding into mortgages.
Despite the downturn, there are signs of stabilization. More disciplined pricing and underwriting could position credit unions to regain some share in 2026, DuPlessis said, though likely incrementally.
Ultimately, the pullback may reflect both caution and adaptation as credit unions navigate a more complex lending environment.
During a side discussion, the live audience answered the following question: Are you good at parallel parking?
The answers were fairly reassuring that we haven't collectively lost this talent.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.