While Wall Street banks have to be publicly admonished by Washington to get them to lend the billions of dollars they received through TARP, credit unions are actively helping the economy by issuing record amounts of loans. One of the goals of Monday's meeting between President Obama and several of the nation's largest banks was, as White House Chief of Staff Rahm Emanuel put it "to get them off the sidelines and get them to play a more active role in our economic recovery." Despite difficult financial conditions, credit unions have already been and continue to show their willingness to stimulate the economy by providing loans to their members , while banks exhibit a continued reluctance to lend.
Through the first nine months of 2009, credit unions posted a record $210.9B in total loan originations, up 5.3% from the $200.2B at the same time in 2008. Total outstanding loans grew 2.6% year over year, from $568.7B to $583.6B. This outstanding loan balance's growth was tempered by the sale of a record amount of first mortgage loans on the secondary market. This at a time when FDIC-institutions cut lending by $210.4B or 3%.
3Q09 Real Estate Lending
As of the end of the third quarter, credit unions had a total outstanding real estate loan balance of $314.7B, up 3.2% from the $304.8B they reported at the same time in 2008. Real estate loan growth was due largely to record first mortgage originations through the third quarter of 2009, which were in turn driven by large numbers of refinanced mortgages.
Credit unions' outstanding 1st mortgage loan balance grew 5.8% annually, from $208.0B to $220.1B. Credit unions had granted $77.1B in first mortgages year-to-date, up 36.5% from their September 2008 figure of $56.5B. However, $42.4B of these were sold on the secondary market, roughly three times the $13.4B sold as of the third quarter in 2008. At the end of the third quarter, all other real estate loan originations decreased 26.5% year over year, down to $18.0B from $24.5B in 2008.
3Q09 Auto Lending
Despite seemingly anemic growth numbers, auto lending has continued to be an area of strength for credit unions. As of September, twelve month outstanding auto loan growth was .5%, up to $179.6B from $178.7B at the same time last year. Indirect loans experienced a more rapid annual growth of 6.5%, from $74.1B in 2008 to $78.9B in 2009. This, while the auto industry total US sales contracted by 23.9% between November 2008 and November 2009. Credit unions' market share in auto loan originations continues to hover around 20%, up dramatically from the average 13% market share the industry saw prior to 2008.
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