With the Federal Reserve Board’s recent move to lower interest rates for the first time in nearly a decade and mention of the economy in most political discussions, you may be wondering what that means for credit unions. After all, consumer confidence, spending, and employment all directly impact loan demand, savings balances, delinquency rates, and more.
The July CUNA Mutual Group Credit Union Trends Report (based on May data) shows a few shifts worth paying attention to.
- During the first five months of 2019, loan balances rose a modest 1.5%, below the 3.5% reported in the first five months of 2018.
- Meanwhile, credit union savings balances grew 7.1% over the last year, above the 6.1% ten-year average growth rate, due to members’ desire to save rather than spend.
- At the end of May, CUNA’s monthly estimates reported 5,550 credit unions in operation, six fewer than one month earlier.
As the report noted, “Consumers are feeling confident this summer due to a number of positive economic factors: tightening labor markets, rising income expectations, low gas prices, record stock and home prices, low debt burdens, low interest rates, low inflation, and rising wages.” We’ll see what the coming months bring, especially with the expectation of continued interest rate reductions.