CUs' Assets Hit an Eye-popping $1 Trillion
Credit union total assets passed the $1 trillion mark for the first time in March--ending the month at $1.02 trillion. Overall, assets grew by 2.4% in the month and by 4.1% during the past year. Credit union assets have more than doubled since year-end 2000, when they were $450 billion.
"We generally don't see big increases or declines in the monthly data so what we typically report isn't eye-popping, headline-grabbing news--so this definitely is one of the most significant developments we've reported from our survey in quite some time," Mike Schenk, CUNA vice president of economics and statistics, told News Now. "It's especially important because it is a direct reflection of the fact that consumers have been increasingly recognizing and embracing the credit union difference."
As member-owned financial cooperatives, credit unions have no stockholders demanding market rates of return on their investments--so credit unions can take the money that other financial institutions use to reward stockholders and return that directly to depositors and borrowers in the form of higher deposit yields, lower loan interest rates, and fewer and lower fees, Schenk explained.
"In 2011, the direct financial benefits accruing to members because of this difference was estimated to exceed $6.25 billion," Schenk noted. "In other words, on average, credit union members saved $6.25 billion, compared with what they would have if they did all of their business at banking institutions."
Credit union loans outstanding remained constant during March, after a 0.2% decrease in February, according to the monthly credit union estimates. Fixed-rate mortgages led loan growth with a 1.5% increase, followed by used-auto loans (0.8%) and new-auto loans (0.2%). Credit card loans declined 0.7%, followed by home equity loans (1.0%), adjustable-rate mortgages (1.1%) and unsecured personal loans (1.2%). Credit union loans totaled $585.3 billion in March, compared with $573.2 bilion in March 2011.
Credit union savings balances grew 2.5% in March, compared with a 2.1% increase in February. Share drafts led savings growth with a 6.9% rise, followed by regular shares, money market accounts, and individual retirement accounts, which grew 4.7%, 1.9%, and 1.5%, respectively. One-year certificates declined 0.6%. Credit union savings in March totaled $881billion--or $51.7 billion more than the $829.3 billion in March 2011.
"March data reflect continued strong growth in savings balances and relatively weak loan growth," Schenk said. "Savings grew by 2.5% in March while loan portfolios were essentially unchanged in the month. That translated into even more liquidity."
The loan-to-savings ratio dropped to 66% from 68% in February. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities--grew to 22% from 21% in February. Regarding asset quality, credit unions' 60-plus-day delinquency rate fell to 1.5% from 1.6% in February. "This is in line with our expectations," Schenk said, "and is entirely consistent with the improvements we've been tracking in the macro economy--especially the improving labor markets and the resulting marginal gains in consumer income."
The movement's overall capital-to-asset ratio remained at 10%. The total dollar amount of capital is $102 billion.