Credit Union Newsletter #43

• Credit Unions Shed $15 Billion in Auto Loans

Credit unions had another record-breaking month in October: The slowest total loan growth and the greatest slough of auto loans in at least 10 years, according to a report from America’s Credit Unions.

Its Monthly Credit Union Estimates released Dec. 13 showed the nation’s 4,665 credit unions held $1.67 trillion in total loans as of Oct. 31, up 2.9% from a year earlier and up 0.4% from September, compared with an average September-to-October gain of 0.7% from 2014 through 2023.

Credit unions held $493.9 billion in new and used car loans Oct. 31, a drop of $15.4 billion since October 2023, or 3% — the biggest 12-month drop since at least September 2014. The September-to-October drop was 0.3%, compared with a 10-year average October gain of 0.6%

• Coastal & Truliant Credit Unions Join Auto Forces 

Credit unions in North Carolina have joined forces to create a CUSO to sell cars through a dealership in Winston-Salem.

Coastal Credit Union of Raleigh and Truliant Federal Credit Union of Winston-Salem announced Dec. 10 they have partnered with TrueBuy Automotive, a Winston-Salem dealership that includes other credit union partners, to create the CUSO called Credit Union Auto Marketplace.

• Transunion: Growth to Keep Slowing for Credit Cards

Credit card growth has been slowing over the past two years, and a report Thursday from Transunion forecasts balances will continue to grow at a slower pace next year, while delinquencies will level off.

Michele Raneri, VP and head of U.S. research and consulting for the Chicago consumer credit reporting agency, said inflation, which fell 2.7% in the 12 months through October, will end 2025 at about 2.26%, while wage increases will at least keep pace.

Meanwhile, the Fed’s G-19 Consumer Credit Report released Monday showed that credit unions held $84.5 billion in credit card debt Oct. 31, up 5.3% from a year earlier and up 1.4% from a month earlier, far more robust than the average September-to-October gain of 0.4% from 2014 through 2023. Credit unions’ share was 6.3% in October, down from 6.4% a year earlier and unchanged from September.

• Members Add to Holiday Spending Rush

The nation’s largest payments CUSO found affiliated credit union members spent sharply more in the peak holiday shopping days from Thanksgiving to Cyber Monday than they did a year ago.

The Velera Payments Index released Tuesday showed that members whose cards are managed by the St. Petersburg, Fla., CUSO spent 22.3% more by debit and 9% more by credit card during the five-day period. 

The Velera report said the record spending gains were reflected in national numbers as multiple sentiment studies showed continued consumer optimism and favorable expectations of inflation.

• NCUA Board Approves Budget & Succession Planning Final Rule

In less than an hour, two important issues were unanimously approved by the NCUA Board during the final meeting of 2024. The two issues: The agency’s 2025-2026 operating budgets and the final rule on credit union succession planning.

In a 3-0 vote, Board members approved the $395.4 million Operating, Capital and National Credit Union Share Insurance Fund administrative budget for 2025, and a $419.5 million budget for 2026. That’s a year-over-year increase of 2.5% for 2025 and a 6.1% increase for 2026 – which is 10% less than the staff-proposed budget for 2025 and nearly 2% less than the 2026 proposed budget.

• Florida Credit Unions Plan to Merge by the End of Next Year

The $2.6 billion Addition Financial Credit Union in Lake Mary, Fla., and the $871 million Envision Credit Union in Tallahassee, Fla., said Tuesday they are planning to merge by the end of next year, if approved by regulators and members.

Based on third quarter NCUA financial results for both credit unions, the combined organization would manage more than $3.5 billion in assets and $2.4 billion in loans, with 801 employees who would run 38 branches and serve nearly 250,000 members across Central and North Florida and South Georgia.

• Ten Credit Unions Pay $59 Million in Dividends

Ten credit unions from Georgia to Pennsylvania are paying members $59.4 million in special dividends, including $46 million paid out Tuesday.

The biggest chunk was $20 million Tuesday from Robins Financial Credit Union of Warner Robins, Ga., 100 miles south of Atlanta. Its Member Rebate represents about $74 per member and 45 basis points (bps) of its return on average assets (ROA) of 1.33% for the 12 months ending Sept. 30. The credit union had $4.6 billion in assets and 271,332 members as of Sept. 30.

The other seven credit unions are:

• American Airlines Federal Credit Union  of Fort Worth, Texas ($9 billion, 368,129 members), which paid members $10 million Dec. 1 as a Bonus Dividend. The amount represents about $27 per member and 11 bps of its 12-month ROA of 0.37%.
• Coosa Pines Federal Credit Union  of Childersburg, Ala., 37 miles southeast of Birmingham ($371.2 million, 25,361 members), paid members $500,000 in November as a bonus dividend and loan interest refund. The amount represents about $20 per member and 14 bps of its 12-month ROA of 1.10%.
• Corry Federal Credit Union  of Corry, Pa., 33 miles southeast of Erie, Pa. ($103.5 million, 10,430 members), paid members $102,406 Oct. 17 as a bonus dividend. The amount represents about $10 per member and 10 bps of its 12-month ROA of 1.46%.
• Educators Credit Union  of Racine, Wis. ($3.4 billion, 232,481 members), which paid members $5.2 million Dec. 1 as a Member Loyalty reward. The amount represents about $22 per member and 16 bps of its 12-month ROA of 1.07%.
• Heritage South Credit Union  of Sylacauga, Ala., 47 miles southeast of Birmingham ($184.6 million, 15,673 members), which paid members $250,000 Dec. 6 as a bonus dividends and interest rebates. The amount represents about $16 per member and 14 bps of its 12-month ROA of 0.16%.
• Top Tier Federal Credit Union  of Clarion, Pa., 78 miles northeast of Pittsburgh ($212.8 million, 15,906 members), which is paying members $400,000 Jan. 1 as a Special Bonus Dividend. The amount represents about $25 per member and 20 bps of its 12-month ROA of 1.09%.
• Wright-Patt Credit Union , Dayton, Ohio ($8.8 billion, 520,736 members), which is paying members $6.8 million Jan. 7 as a Special Patronage Dividend. The amount represents about $13 per member and 8 bps of its 12-month ROA of 0.7%.

Sources  :  CUtimes,  CU Today Info