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Recession trends ahead: Report

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Credit union growth stagnated in some key metrics in September, according to the November Trends Report from CUNA Mutual Group.

Loan balances rose 0.7% in September, down from the 0.8% growth in balances reported during the same time last year. Total CU assets dipped 0.1% in September.

The number of credit unions also fell to 5,476, down 12 from a month earlier, the report said.

The average credit union loan-to-savings ratio dropped as well to 84.7%, down from 85.2% a year earlier due to deposit growth outpacing loan growth. As a result of falling loan growth, credit union liquidity has ticked up.

Forecasts for 2020 predict a further slowdown in credit union lending and membership growth with consumers accessing less credit. According to the report, the economy is expected to grow at about a rate of 1% to 1.5% next year, slower than the 2.3% pace set in 2019.

The economic slowdown is linked to the trade war, tighter monetary policy and the boost provided from last year’s deficit-financed tax cuts fading. Job creation is expected to decline, which should trigger a rise in the unemployment rate.

The report also predicted future rate cuts in 2020, something that the Federal Reserve has already done three times within a four-month window this year.

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