Credit Unions Carve Out Bigger Slice of Consumer Loans

Credit Unions Carve Out Bigger Slice of Consumer Loans
May 9, 2017 Marketing GrafWebCUSO

Borrowers turned to credit unions for cars, motorcycles, boats, college and credit cards in March to an extent not seen in 16 years.

Credit unions held $393.7 million in consumer loans in March, up 14.1% from a year earlier, the Federal Reserve reported in Friday’s consumer credit report.

Credit unions’ share of consumer loans was 10.48% in March up from 10.38% in February and 9.75% in March 2016. It was the biggest share for credit unions since it stood at 10.5% in February 2001, President George W. Bush’s first full month in the White House and the month that Ariel Sharon was elected prime minister of Israel.

Consumer borrowing from all U.S. lenders reached $3.75 trillion as of March 31, up 6.1% from a year earlier.

Credit unions set the record by a slight increase in its share of non-revolving loans. For credit unions that category is dominated by car loans. Education loans accounted for 51% of the portfolio in March for all lenders, which include the federal government for student loans. Car loans accounted for 40% of U.S. non-revolving loans.

Student loans rose 5.9% to 1.44 trillion in March, while automotive loans rose 7.0% to $1.12 trillion.

Non-revolving loans rose 6.4% to $2.80 trillion for all lenders in March, while rising 15.2% to $341.6 billion for credit unions. That represented a credit union share of 12.18% in March, up from 11.24% in March 2016. It was the highest share of non-revolving loans since December 2009, when it was 12.31%.

Banks held $687.1 billion in non-revolving consumer credit in March, up 5.8% from a year ago, and down slightly from their all-time peak of $688.3 billion in January.

Banks’ shares of non-revolving loans fell to 24.50% in March from 24.64% a year earlier, while the share held by finance companies fell to 21.58%, down from 23.38% a year earlier.

Credit unions held $52.1 billion in credit card debt in March, up 7.0% from a year earlier. Total U.S. credit card debt rose 5.2% to $950 billion.

Credit unions in March held 5.48% of U.S. credit card debt. It was the same share they held in February, which was their largest share of the nation’s credit card debt ever. It was 5.39% in March 2016.

Banks’ share of credit cards was 83.90% in March, up from 83.70% in March 2016. Finance companies’ share was 5.99% in March, up from 5.88% a year earlier.