Credit unions originated a record $144.2 billion in loan volume in the first six months of 2009. This marks the third consecutive increase in volume and second consecutive record level of origination activity at mid-year. The extraordinary results come during the worst credit crisis in a generation and contrast with those of FDICinsured institutions. The FDIC reports four consecutive quarters of declines in loans outstanding at banks and six consecutive quarters of reductions in unused loan commitments through mid-year 2009.
Despite the strong loan origination activity, growth in loans outstanding at credit unions is slowing. The growth rate of loans on the balance sheet fell to 4.1 percent over the past 12 months, down from 7.7 percent a year ago. This is largely driven by the fact that over 38 percent of loan volume is from first mortgage lending through the first half of 2009. Due to historically low mortgage rates in the beginning of the year, a large portion of this volume is refinance activity with some of the volume replacing existing member loans. The other factor is asset liability management considerations, as credit unions have sold a record $30.8 billion of loans on the secondary market as of June.