Membership, Loan Increases Good News for Economy: CUNA

Credit Union National Association (CUNA) President/CEO Bill Cheney said the addition of 1.3 million new members in the first half of 2012, as reported in National Credit Union Administration (NCUA) statistics released Friday, shows "more and more consumers are eager to take advantage of the financial benefits they can realize at credit unions."

The addition of 1.3 million members in just the first half of this year is more than credit unions realized in full-year 2010 and 2011 combined, and is the second-highest increase in the past decade. "Needless to say, 'Bank Transfer Day' seems to continue to have an impact," Cheney added.

The agency also reported a membership increase of 643,322 during the second quarter of 2012, and the 93.1 million credit union members nationwide deposited an additional $2.7 billion in savings into their credit unions, the NCUA added.

Total loan balances increased by 1.7% in the second quarter of 2012, bringing the amount of outstanding loans held by credit unions to $581.7 billion, the NCUA reported. This increase, the largest recorded since the fall of 2008, shows that credit unions "are playing an important role in efforts to create jobs, stimulate small businesses, and revitalize communities," NCUA Chairman Debbie Matz said Friday. 

First mortgage loans increased by 1.7%, new and used auto loans each rose by 2.8%, member business lending grew by 1.2%, and short-term small-amount loans increased by 23.9% during the quarter, the NCUA added.

This is the fifth straight quarter the NCUA has reported positive loan growth at credit unions. Moreover, first-half 2012 credit union loan originations topped $155 billion -- a $35 billion, 29% increase compared to same-period results in 2011. The total 2012 first quarter credit union loan originations set records on several fronts: The total granted, and the increases -- both in dollar and percentage terms -- far surpassed any results reported over the past 20 years, CUNA senior economist Mike Schenk said.

"With lending on the rise, it's also clear that credit unions are helping consumers and small businesses dig out of the great recession and help our nation's economy recover," Cheney said.

The credit union industry's overall performance grew stronger in almost every category during the quarter. "Assets, earnings, and net worth rose, as charge-offs, bankruptcy filings, and loan loss reserves declined," Matz said.

The agency reported:

• Credit union net worth grew 2.1% to $102.4 billion;
• Credit union industry total assets increased 0.6% to $1.007 trillion;
• Total savings increased 0.3% to $868.8 billion; and
• Credit union net income increased by 2.9% to $2.13 trillion.

The overall credit union delinquency ratio fell by 24 basis points (bp), totaling 1.2% at the end of the second quarter. Credit unions' net charge-off ratio declined by 3 bp, totaling 0.75% at the end of the quarter, and new bankruptcy filings fell by 17.3% when compared to the previous quarter's total. However, the agency reported, the percentage of loans that were charged off due to bankruptcy increased to 21.4%. Bankruptcy-related charge-offs accounted for 20.8% of charged-off loans reported in the previous quarter, according to the NCUA.