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Credit union delinquencies accelerate
Written on Jan 17, 2025
Another decline in credit unions’ auto loan portfolio dragged down total loan growth for November, and the rise in overall delinquency rates accelerated this fall, according to a report from America’s Credit Unions.
The trade group’s Monthly Credit Union Estimates released Jan. 9 showed the 60-day-plus delinquency rate was 0.99% as of Nov. 30, compared with 0.80% a year earlier and 0.93% in October.
It also revised its delinquency rates upward by 2 basis points for August and by 3 bps for September and October. From November 2019 through October 2023 overall delinquency rates ranged from a low of 0.42% in March 2022 to 0.75% in October 2023.
Automobile lending continues to be a major problem area for credit unions. The balance of auto loans has fallen in eight of the nine months from March through November, except for a 0.4% gain in June 2024.
Moreover, each of new and used car balances has fallen in each of the last five months reported — July through November.
The trade group’s Monthly Credit Union Estimates showed total car loans fell 3.5% to $491.8 billion from a year ago and fell 0.3% from the previous month, compared with an average October-to-November gain of 0.5% from 2014 through 2023.
Twelve-month growth rates for auto loans dipped to a low of 0.8% in June 2020 — near the worst of the Covid-19 pandemic — before rising to a peak of 20.2% in December 2022. November's 3.5% drop is a record for the 10-year span.
New car loans fell 6% to $168.4 billion from a year ago and fell 0.6% from the previous month, compared with an average November gain of 0.6%.
Used car loans fell 2.1% to $323.4 billion from a year ago and fell 0.1% from the previous month, compared with an average November gain of 0.4%.
Total loans were $1.67 trillion, up just 2.4% from a year ago and continuing the 10-year lows of September and October. The gain from October was 0.4%, compared with an average November gain of 0.6%.
Non-auto loans grew 5.1% to $1.18 trillion from a year ago led by second-lien residential mortgages. Home equity lines of credit and other second-liens grew 17.2% to $158.4 billion from a year ago and rose 2.5% from the previous month, compared with an average November gain of 0.3%.
Savings once again grew faster than loans, further reducing the loan-to-share ratio.
Savings were $2 trillion, up 5.3% from a year ago and rose 1% from October, compared with an average November gain of 0.3%. The loans-to-savings ratio was 83.4% as of Nov. 30, compared with 85.8% a year earlier and 83.9%, a month earlier.
The report also showed the following for the nation’s 4,661 credit unions:
Unsecured consumer term loans grew 4.8% to $73.8 billion from a year ago and rose 2.4% from the previous month, compared with an average November gain of 0.9%.
First-lien mortgages grew 4.7% to $611.8 billion from a year ago and rose 0.4% from the previous month, compared with an average November gain of 0.6%.
Surplus funds were $599.4 billion, up 9.3% from a year ago and rose 1.7% from October, compared with an average November gain of 0%.
Assets were $2.37 trillion, up 4.4% from a year ago and rose 0.4% from October, compared with an average November gain of 0.5%.
Capital was $229.1 billion, up 13.1% from a year ago and rose 0.7% from October, compared with an average November gain of 0.9%.
Borrowings and other liabilities were $140.5 billion, down 16% from a year ago and fell 7.1% from October.
On Jan. 8, the Federal Reserve’s G-19 Consumer Credit Report showed credit cards grew 4.4% to $84.6 billion from a year ago and rose 0.6% from the previous month, compared with an average November gain of 1.5%.