Industry Performance: Member Relationships (4Q21)

Inflation and international trade sanctions cast shadows over member spending behavior in the near future.



The U.S. economy prospered in the fourth quarter despite supply chain bottlenecks and viral variant fears. Holiday travel and shopping propelled the economy to its best quarter of the year, as measured by GDP.

Americans tapped into their pandemic-era savings and borrowed at low rates, contributing to hot real estate and used auto markets. With spending up, deposit growth slowed from a quarter ago, but savings rates remain healthy. Many — but not all — Americans are ready to spend after more than a year of lockdowns and quarantines, and fourth quarter results reflected this sentiment.

Still, recent international trade sanctions and continuing inflation cast shadows over member spending behavior in the near future.

Key Points

  • Total membership at U.S. credit unions nationwide grew 4.2% year-over-year to 131.0 million as of Dec. 31.
  • Auto penetration increased 2.6 percentage points in the past 12 months, reaching a record 24.1% as of Dec. 31.
  • Year-to-date loan originations per member increased 12.7% annually to $6,081 through Dec. 31.
  • The average member relationship increased 6.0% annually to $22,534. Average share and loan balances increased 8.2% and 2.7% year-over-year, respectively.

The Bottom Line

Loan penetration rates were strong across the board at U.S. credit unions, with real estate the only category to decline on an annual basis. Following a huge year for real estate in 2020, the housing supply shortage restricted many would-be homeowners from purchasing. Origination dollar totals remain high, but numbers are down, and credit unions are selling many low-rate mortgages to secondary market buyers.

In the auto loan space — where credit unions historically thrive — heightened member demand for vehicles and an expanding credit union loan participation market pushed auto penetration to a record high in the fourth quarter. Still, much like with residential real estate, a shortage of vehicle supply is holding back total auto growth.

Both members and credit unions are looking forward to supply chain improvements in 2022. Overall, average member relationships at U.S. credit unions reached new all-time highs as members continued to trust credit unions with their finances.

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March 28, 2022



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