The “soft patch” in the nation’s economy may be past its low point, according to analysis provided in the June 2007 Credit Union Trends Report  (371 KB/8 Pages) newsletter.

Although the housing sector has a ways to go before a full-fledged recovery is underway, there are signs of improvement, reports the monthly newsletter, using data through April 2007.

Yet, “The simple fact is that the economy will not see robust growth in the near term, and major driving factors are not under the complete control of politicians or the Federal Reserve,” says Dave Colby, CUNA Mutual’s Chief Economist.

For credit unions, says Colby, “The environment within your field of membership is your most important indicator.”

Other report highlights for credit unions:

• Both savings and assets fell in April due to payroll timing. However, overall annual growth showed improvement with assets of $755 billion in April 2007, up 5.3% from a year earlier.
• Annual loan growth of 7.0% continues a 19-month downward spiral since its peak of 10.9% in September 2005. The broad-based trend is driven by a slowdown in vehicle loans and real-estate secured loans, comprising 35% and 50% of all loans, respectively.
• Solid capital growth of 8.0% and a drop in assets pushed the capital-to-asset ratio to 11.4% in April. The loan-to-share ratio rose to 80.4%, an increase of 154 basis points from April 2006.
• The credit union marketplace saw a loss of 81 institutions in the first four months of 2007. The total at the end of April was 8,581, down 323 from a year ago.
• Credit union membership of 89 million includes a year-to-date net gain of nearly 900,000.

“To succeed in the near term and prosper in the long run, credit unions must deliver what members will need to improve their personal financial picture,” says Chief Economist Colby. “Most importantly, credit unions must convince members to take action.”

View the three most recent monthly Credit Union Trends Report newsletters.