Rising lending trends. (Source: Shutterstock)

While national statistics show home and auto sales have fallen this year, credit unions are having one of their best lending seasons in years.

The latest credit union monthly estimates from CUNA show the nation’s 5,052 credit unions held $1.39 trillion in total loans as of May 31, up 14.6% from a year earlier. Annual loan growth exceeded 10% in March for the first time since December 2017, and continued to accelerate.

The April-May loan balance gain was 2.3%, more than double the average April-May gain of 1.1% from 2015 to 2019.

In addition, the growth has been broad:

  • Total auto loans rose 14.3% to $450 billion in May from a year earlier, and rose 2.3% from the previous month, compared to an average gain of 1.1 % over 5 years.
  • Total home loans rose 13.7% to $705.6 billion in May from a year earlier, and rose 2.1% from the previous month, against a 5-year average gain years by 0.8%.
  • Credit card balances rose 11.1% to $66.8 billion in May from a year earlier, and were up 2.2% from the previous month, versus an average gain of 1% over 5 years.

Credit card balances declined after COVID-19 was declared a pandemic in March 2020 and have remained below the February 2020 mark for more than two years.

Line chart showing credit card balances have surpassed pre-pandemic levels.

However, the Fed’s G-19 consumer credit report released on Friday showed banks and credit unions finally recovered in May with balances up 1.9% at credit unions. credit and 2.4% in banks compared to their February 2020 levels.

The Fed’s latest report revised April’s numbers upward, showing that credit unions actually overshot April’s recovery by 0.2%, while its previous report showed that their balances were still slightly below the mark.

Credit unions’ share was 6.3% in May, unchanged from April and down from 6.5% in May 2021.

Banks held $964.4 billion in credit card debt in May, up 15.1% from a year earlier. Their share was 90.7% in May, unchanged from April and up from 89.9% in May 2021.

In the auto market, CUNA found that new auto loan balances rose 10.8% to $159.7 billion in May from a year earlier, and rose 2.3% from the previous month, against an average gain of 1% over 5 years.

Data released Friday by the Federal Reserve Bank of St. Louis shows that January-June new car and light truck sales are down 18% from the first half of 2021.

In May, new vehicles sold at a seasonally adjusted annual rate (SAR) of 12.7 million, down 12.2% from April and 24.8% from May 2021. June increased by 2.3% compared to May.

CUNA found that used car loans rose 16.3% to $290.3 billion in May from a year earlier, and were up 2.3% from the previous month, against an average gain over 5 years of 1.2%.

Cox Automotive released used car data for June on Friday, and Cox Automotive chief economist Jonathan Smoke said it showed signs the used car market is accelerating this year, and that July sales could exceed those of July 2021.

“Contrary to some opinions, there is little evidence that consumers are opting out, either with respect to the retail vehicle market or more broadly by reducing total spending,” Smoke said.

“If the consumer pulls back, we will see a recession because the US economy is consumer driven,” he said. “But I see no evidence that we are entering or are already in a broad market recession. The job market is strong, so consumer demand is there.

Credit unions have also bucked mortgage market trends. The Mortgage Bankers Association’s June 10 forecast shows first mortgage balances rose 8.4% in March and 8.1% in June, from a year earlier.

CUNA found that first mortgage balances rose 11.4% in March and 14.4% in May.

The CUNA report also showed:

  • Assets stood at $2.15 trillion, up 6.3% in May from a year earlier and down 0.3% from the previous month.
  • Savings stood at $1.88 trillion, up 7.8% in May from a year earlier, and down 0.7% from the previous month.
  • Members were 133.5 million, up 3.2% in May from a year earlier and 0.2% from the previous month.
  • The 60+ day delinquency rate was 0.42% as of May 31, down from 0.47% a year earlier and 0.43% a month earlier.
  • Loans per member were $10,404, up 11% in May from a year earlier, and 2.1% from the previous month.
  • Savings per member were $14,074, up 4.4% in May from a year earlier, and down 0.9% from the previous month.