Strong Credit Union Loan Growth in Key Areas

As other financial institutions pulled back from the market, the credit union loan portfolio posted strong growth in many key areas during 2008.


The credit union loan portfolio posted strong growth in key categories in 2007. Total loans outstanding grew 6.5% over the course of the year to $538.6B. This increase was due in part to a strong year in total loan originations. Loan originations totaled $255.6B in 2007, a 1.4% increase from 2006.

Real Estate Lending Leads Results

Despite the growth in balances, the composition of the credit union loan portfolio changed very little during 2007. First mortgages are still the largest component of the loan portfolio, at 34.2%. First mortgages also posted the greatest increase in portfolio percentage, up 1.7% from December of last year. That increase was driven by a $60.3B increase in total mortgage originations, allowing credit unions to capture 2.6% of the overall first mortgage origination market. First mortgages outstanding as of year-end total $184.3B, up 12.2% from the previous December.

Growth not Confined to Real Estate Lending

Strong growth figures were not only seen in first mortgages. Two additional segments also posted double-digit growth during the year. Credit card loans outstanding increased at their fastest pace in more than ten years, up 13.2% on their way to $30.8B in outstanding balances. This increase helped the outstanding balance of credit card loans reach an all-time high for the credit union industry. This growth came as many credit unions reinvested in their card programs, combining added reward benefits with lower rates and fees.

Another strong performer in 2007 was member business loans, which increased 14.3% during the year. As more credit unions become active in the business lending sector, balances continue to rise. At year-end, member business loans comprised $22.4B of the total loan portfolio, accounting for a small but growing percentage at 4.2%.

As credit unions move into 2008 opportunities still exist to assist members who are being impacted by the credit crunch. Acting on these opportunities will help credit unions continue to post solid loan performance in 2008.




March 3, 2008



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