Credit Union Loan Originations Exceed $271 billion in 2009 – A New Record!

The nation’s 7,710 credit unions posted a new record in total loan originations by granting more than $271.9 billion in 2009, a 7.1 percent increase over 2008. New loans were extended to almost 20 million members while credit was being curtailed across the financial system. In a year when providing credit was the number-one economic policy priority for the country, total credit union loans outstanding set a new high of $580.5 billion.

The challenge of extending credit was highlighted in the just-released yearend data on the nation’s banking system. For 2009, the FDIC’s totals showed an “epic” fall of more than 7 percent in total bank loans – the sharpest decline in lending since 1942.

However, 2009 was not a one-time result for credit unions. In 64 of the past 65 years, credit unions have increased their total loans. The average compound annual growth during this 65-year period is 13.8 percent.

“In every loan category and every geographic market, credit unions stood by their members,” said Chip Filson, President of Callahan & Associates. “The cooperative model proved to be a reliable lender in the most severe credit crisis in a generation, just as Congress intended.”

New Lending Benchmarks

In the face of unprecedented market pressures on credit, the cooperative system set new lending benchmarks in2009:

• Credit card outstandings plus unused lines grew to a new peak of $108.1 billion, whereas bank credit card lines fell by more than $1 trillion.
• Indirect auto loans reached $76.4 billion, an increase of 2 percent during the worst auto-sales year of the decade.
• First-mortgage originations were $95 billion, resulting in credit unions capturing a 4.5 percent market share.
• Loans for member businesses granted in 2009 totaled $9.7 billion, and total outstanding business loans grew by 10.5 percent. Small businesses are the traditional sparkplug for job creation.

Register for our free Trendwatch webinar to learn more about credit union performance in 2009.

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Credit Union Strategy & Performance (CUSP) – 5 online financial scorecards you can customize to compare your credit union to any 4 other individual credit unions, asset-based peer groups (like your examiner does!), and state wide performance. Our favorite? The “Scorecard” with over 100 ratios displayed side-by-side including growth rates, member metrics, throughput (productivity & efficiency), and loan portfolio composition and quality. Download a sample. $129 includes a 4 quarterly print editions and plus a full year of access to the online tools.

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National and local media coverage of credit unions has been at an unparalleled high. Personalities like Suze Orman have instructed consumers to “move your credit card to a credit union.” Credit unions are at a “tipping point” in terms of their greater potential. These initiatives, as well as a renewed focus by politicians on consumers’ well being, underscore the critical role credit unions can play in the economy in 2010. While share growth is expected to continue, lending will be critical to the credit union business model, given the low interest rate environment.

How should your credit union react? The first step is to examine the market and industry trends of 2009, understand the meaning of these trends, and what they mean for 2010. Callahan & Associates’ Trendwatch Call provides insight into these critical trends and includes:

• Goldman Sachs’ Economic Outlook for 2010 and beyond
• Year-end data on the financial and performance trends for the credit union industry
• Example of how credit unions are capitalizing on today’s unique opportunities