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Credit union loan growth falls below 7% for first time since 2013

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Credit union loan growth is slowing.

The September Trends Report from CUNA Mutual Group examining July data found that credit union loan balances rose 6.6% in the year ending in the second quarter of 2018. That’s the first time that credit union loan growth was below 7% since 2013.

Credit union loan balances remain up 2.8% year-to-date, but that’s still half of the 5.5% pace that was set last year.

CUNA Mutual also noted that used auto loan balances are inching along at a “remarkably low” rate of 2.4%.

Mortgage volume origination reflected a similar pattern. In the first half of 2019, CUs originated $67.9 billion in first mortgages, which was a 3.4% dip from the first half of 2018.

CUNA Mutual also predicted that the Federal Reserve will continue to lower interest rates by 50 basis points over the next few months.

“The recent flattening and inversion of the Treasury yield curve will weigh on net interest margins over the next year as funding costs rise faster than asset yields," the trends report said.

The industry is down 177 credit unions year over year, but that's still less than the 211 CUs that disappeared in the 12-month window ending in July 2018. Credit union membership ticked upwards by 0.32% in July.

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