The economy continues to drag, and it will be some time before things start to look up again, according to analysis provided in the May 2008 Credit Union Trends Report  (417 KB/8 pages) newsletter.

According to the report, in the past month energy prices have risen 15%, consumer sentiment has fallen another 10%, and the credit ills that began with the housing industry have spread to the automotive markets. “We have a distance to go before the trough of this economic cycle is reached,” advises CUNA Mutual Chief Economist Dave Colby.
 
The monthly report, published by CUNA Mutual using data compiled through March 2008, sees an important role for credit unions in consumer finance: providing access to reasonably priced credit when others have exited the market, as well as providing an insured safe haven for consumer savings.

Other report highlights for credit unions:

• Loans grew at a 7.2% annual rate in March, led by a surge in real estate-secured loans, which are up 3.3% for the year. 
• Vehicle loans continued to decline. The portfolio is down 1.3% for the year and 1.1% over the past year with losses concentrated in new-vehicle loans. 
• “Weakness in vehicle lending results over the next few years, moderate credit card advances, and real-estate capacity issues imply loan growth will average 6.3% annually through 2010,” says Colby.
• The loan-to-share ratio fell to 80.1% in March but remains 87 basis points higher than a year ago. The capital-to-asset ratio was unchanged at 11.1% with 5.8% capital growth. “The delinquency rate held below 1%, but some loans may have gone directly into charge-offs,” Colby notes.
• Total assets are up 4.7% for the year to $813 billion, 7.3% above the March 2007 level.
• There were 8,337 credit unions at the end of March 2008, a net loss of 59 for the year and 272 over the past year.
• Total credit union membership topped 90 million for the first time in March, a gain of 824,000 in 2008 and an annual increase of 1.6 million.

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