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Do Credit Unions Have A High Barrier To Entry Problem?
Written by Cyndie Martini
on May 18, 2021

Recent reports released by CUNA and the Fed’s G-19 Consumer Credit Report showed that credit union loan portfolios fell in March compared to other lenders. However, credit union first mortgages grew faster than that of banks. We'll look at three categories of loans: first mortgages, credit cards, and automotive loans.

First Mortgages

First mortgages for credit unions grew at 9% to $530 billion over the last 12 months. While still a decline in growth, it is higher than banks and other lenders. First mortgages for all lenders, compared to a year earlier, grew at only 4.3%.

Credit Cards

Consumers paid down a lot of their credit card balances throughout 2020. These pay downs started once the pandemic was declared in March 2020. As a result, both Banks and credit unions saw decreases in the balance of their credit card customers.

Credit union card balances had been declining at a slower rate than that of banks since June of 2020. Credit unions' rate of change is listed below, followed by banks:

  • June: -2.4%, -7.6%
  • Sep: -4.9%, -9.7%
  • Dec: -6.4%, -11%
  • March 2020: -10.3%, -9.6%

As you can see, in March 2020, the numbers flipped, with bank credit card balances declining slower than credit union balances. This left credit unions with a $53.8 billion balance for credit cards in March 2020 and banks with a balance of $831 billion.

Automotive Loans

Credit unions saw only a 0.4% growth in automotive loans, while other lenders saw 6.1%. New car loans declined (-6.5%) while used car loans kept their upward trend (+4.9%). The 12-month rate of change for used car loans at credit unions was 4.1%.

Credit unions held 31% ($383 billion vs. $847 billion for other lenders) of automotive loans in March of 2020, which is down from 32.2% in March of last year. In addition, credit unions saw slower portfolio growth from December to March, coming in at 0.3% vs. 0.6% at other lenders.

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