Presentation is loading. Please wait.

Presentation is loading. Please wait.

CUNA Mutual Group Proprietary Reproduction, Adaptation or Distribution Prohibited © CUNA Mutual Group Economic & Credit Union Monthly Update June 2015.

Similar presentations


Presentation on theme: "CUNA Mutual Group Proprietary Reproduction, Adaptation or Distribution Prohibited © CUNA Mutual Group Economic & Credit Union Monthly Update June 2015."— Presentation transcript:

1 CUNA Mutual Group Proprietary Reproduction, Adaptation or Distribution Prohibited © CUNA Mutual Group Economic & Credit Union Monthly Update June 2015 Table of Contents Economy………………………….Page 2-9 Household Financial Condition…Page 10-15 Credit Union Loans….…..………Page 16-25 Credit Union Investments……….Page 26-29 Credit Union Savings……………Page 30-39 Credit Union Earnings……….….Page 40-51 Credit Unions and Members…...Page 52-55 Economic & CU Forecast……....Page 56-57 If you have any questions or comments, please contact: Steven Rick, Chief Economist CUNA Mutual Group – Economics 800.356.2644, Ext. 665.5454 steve.rick@cunamutual.com To access this monthly update go to: www.cunamutual.com/trendsreport

2 2 Economics Section Gross Domestic Product Labor Market Inflation Interest Rates Auto and Home Sales Exchange Rate and Oil Prices Stock and Home Prices

3 3 The economy contracted at a 0.7% annualized rate in the 1 st quarter, below the long-run natural rate of 2.5%, due to falling energy investment, the west coast port strike, adverse winter weather and the rising value of the dollar. Final sales subtracted 1.1 percentage points but the change in inventories contributed 0.3 percentage points. Economic growth should accelerate to 3.0% in 2015, and 3.3% in 2016, above the 2.4% pace set in 2014. The economy is operating with a -2% “output gap” but is rapidly approaching its potential level of output. The Federal Reserve will therefore begin increasing the fed funds interest rate later in 2015. Rising Economic Growth and Falling GDP Gap

4 4 The labor market added 280,000 jobs in May, and over 3 million during the last 12 months. Average hourly earnings rose 0.3% in May and 2.3% during the last year. Rising earnings and low inflation are pushing up real earnings. Expect monthly job gains to average over 240,000 in 2015, bringing the unemployment rate close to the 5% natural rate by the spring of 2016. The unemployment rate rose to 5.5% in May, which corresponds to 8.7 million unemployed workers, as 400,000 workers joined the labor force. Underemployment remained at 10.8% or 17.3. million (8.7 mil. unemployed, 6.7 mil. involuntarily part time, 1.9 mil. marginally attached). Strong employment gains will increase household incomes, confidence and desire to borrow and spend. Expect loan growth to accelerate in 2015. Strong Employment Gains Close In On Full Employment

5 5 Headline inflation fell -0.1% during the last 12 months while core inflation rose 1.8%, both below the Federal Reserve’s target of 2%. There are 5 factors keeping inflation low: the negative output gap leads to idle capacity, the unemployment rate above the natural unemployment rate keeps wage growth slow, a rising value of the dollar keeps import prices low, the “commodity super cycle” keeps commodity prices low, and low oil prices. The 10-year Treasury interest rate rose in May because of rising inflation expectations (due to better economic trends and rising oil prices) and rising real interest rates (due to a sell-off of safe Treasury bonds). Inflation Below Target and Falling Inflation Expectations Nominal Rates Expected Inflation Real Interest Rates Nominal Interest Rates = Real Rates + Expected Inflation

6 6 The Federal Reserve will raise short-term interest rates by 1.25 percentage points per year for 3 years starting in the forth quarter of 2015. Interest rates will “normalize” in 2018 at levels below previous plateaus due to lower real interest rates and lower expected inflation. The 10-year treasury interest rate will remain below 3.0% through 2015 due to a low demand for money (low supply of bonds) and a higher supply of money (higher demand for bonds) than we have seen in the last 30 years. The short-end of the yield curve (out to 3 years) steepened over the last month and over the last year, encouraging more investments in the 1-3 year range and boosting net interest margins. Falling Interest Rates and Steeping Yield Curve

7 7 U.S. vehicle sales fell to a 16.5 million unit seasonally-adjusted annualized basis in April, down from 17.1 million units in March, due to a rise in housing starts and weaker demand from the energy sectors. Sales were still up 3% year over year. Low gas prices are driving sales of light trucks which accounted for 55% of vehicle sales, the highest share in 10 years. Consumer fundamentals remain favorable to drive sales into the future. Expect car sales to increase 4% in 2015 to reach 17 million units sold and decelerate to 16.5 million in 2016. Existing home sales fell 3.3% in April, falling to a 5.04 million annual rate, but are still up 6.1% from April 2014. Home inventories remain tight leading to home prices rising 5% in 2015. Strong Auto Sales and Rising Home Sales

8 8 The U.S. dollar rose 18% over the last year, reducing the cost of imports to U.S. residents but raising the cost of exports from the point of view of foreign buyers. This will worsen the trade deficit and slow economic growth. The price of a barrel of oil was $59.4 in May 2015, down from $102.2 one year ago, a 42% decline. This will slow energy investment but boost consumer spending. The Dollar is Up and Oil Prices are Down

9 9 Household balance sheets have improved over the last year due to rising stock prices and home prices. Stock prices rose 12% over the last year. Home prices rose 5% over the last year, due to a lack of housing inventory for sale colliding with rising home demand. Rising Stock and Home Prices

10 10 Household Financial Condition Income Statement Balance Sheet

11 11 Personal income rose 0.4% in April and 4.1% year over year, due to a rise in asset income growth. Wage income growth accelerated to 0.2%. Nominal spending fell slightly in April but rose 2.8% year over year. The outlook for spending is positive because of the recent rise in discretionary items (recreational goods, furniture and appliances, and vehicles sales). Lower gas prices are freeing up cash for other purposes. But consumers are choosing to save the windfall or pay down debt, rather than spend. Household balance sheets have improved over the last year as stock prices and home prices rose 10% and 5%, respectively. This will boost spending from the “wealth effect” and from additional access to credit. The lowest debt burdens & payments in 35 years is freeing up income for additional spending. A surge in household formations will lift spending in the next couple of years. Household Income Statement Income + Change Debt = Taxes + Debt Interest + Spending + Savings

12 12 Consumer credit rose $20.6 billion in April, an deceleration from $21.3 billion in March. Consumer credit rose 6.6% over the last year (revolving rose 3.3% and nonrevolving rose 7.8%). Big ticket items (auto and student loans) continue to be the major driver of consumer credit. Rising consumer confidence is a sign consumers are more willing to take on debt via credit cards. The household debt service ratio (mortgage and consumer debt payments to disposable personal income) fell to a record low 9.91% in the fourth quarter of 2014, down from 13.17% reported in the fourth quarter of 2007. Falling interest rates and debt levels both caused the decline. Low debt payments are freeing up disposable income for additional consumption or savings. Household Income Statement Income + Change Debt = Taxes + Debt Interest + Spending + Savings

13 13 The saving rate (savings / disposable personal income) rose to 5.6% in April from 5.2% in March, and remains elevated. Savings should decline as households begin spending some of their gasoline savings windfall. In this environment of modest savings, spending gains will be highly dependent on income growth and consumers preferences for additional savings. Consumer Confidence Index rose to 95.4 in May, but below the first quarter average of 101.3. Consumer Sentiment Index fell to 90.7, a six month low due to higher energy prices. Household Income Statement Income + Change Debt = Taxes + Debt Interest + Spending + Savings

14 14 During the first quarter of 2015, the real annual purchasing power of financial assets are the highest in U.S. history at $5.22 per dollar of disposable income (5.22 years worth of disposable income), up 24% from the cyclical low of 4.22 set back in the first quarter 2009. Rising stock prices were the major contributing factor. The real annual purchasing power of non-financial assets rose to $2.24 per dollar of disposable income (2.24 years worth of disposable income), up 14% since the cyclical low of 1.96 set in the third quarter of 2011, due mainly to rising home prices. Non-financial assets as a percent of disposable income is down 24% from the record high of 2.96 set back in the fourth quarter of 2005. Household Financial and Non-Financial Assets are Rising

15 15 During the first quarter of 2015, households’ debt burden ratio (debt-to-disposable-income) fell to 1.02, from 1.29 in the fourth quarter of 2007. Financial institutions writing off and households paying off mortgage debt were the major contributing factors for the decline. The deleveraging phase of the business cycle has come to an end. If growth in debt equals the growth rate of disposable income over the next few years the debt burden ratio will remain around 100% which is what economists believe is sustainable in the long run. The real annual purchasing power of household net worth rose to $6.39 per dollar of disposable income (or 6.39 years worth of disposable income), slightly below the 6.51 record set back in the fourth quarter of 2006. Household Balance Sheets Are Healing

16 16 Credit Union Loans Section Total Loans Loan Quality New Auto Used Auto Credit Card Home Equity Fixed-Rate First Mortgage Adjustable-Rate First Mortgage

17 17 Expect loan balances to grow 11% in 2015 and 10% in 2016 as the strengthening economy boosts members’ willingness and ability to accumulate debt and therefore satisfy some of their pent up demand that was accumulated during the weak and uncertain economic recovery of the last six years. But the loan growth disparity is rather large. In the last 12 months ending in Q1 2015, credit unions with assets greater than $1 billion reported an 13.3% increase in loan balances versus credit unions with assets less than $20 million reported loan growth of only 2.9%. Rapid Credit Union Loan Growth

18 18 The credit union loan delinquency rate (loans two or more months delinquent as a percent of total loans outstanding) rose to 0.77% in April, from 0.74% in March, but is down from 0.84% set in April 2014. Today’s delinquency rate is only slightly above the 0.71% average reported for the years 2003-2007. So, 5 years after the Great Recession ended there appears to be few credit problems still lingering on credit union balance sheets from that time. Net charge-off rates fell to 0.47% in Q1 2015, from 0.53% in Q4 2014 and 0.50% in Q1 2014. Improving Credit Quality As Unemployment Falls

19 19 Credit union loan balances grew at a 10.7% seasonally-adjusted annualized growth rate in April, similar to the pace set during the credit boom of 2003-2005. April’s seasonal factors usually add 0.20 percentage points to the underlying trend growth rate. The strong lending “season” is upon us as April through August are the strongest loan growth months of the year. Rapid Credit Union Loan Growth

20 20 Credit union new-auto loan balances grew at a 23.7% seasonally-adjusted annualized growth rate in April, the close to the fastest pace on record. April’s seasonal factors usually shave off 0.13 percentage points from the underlying trend growth rate. The economic factors that are currently supporting vehicle lending are an improving job market, greater access to credit, low interest rates, improving household balance sheets, and rising incomes. Expect car sales to increase 4% in 2015 to reach 17 million units sold as more pent up car demand is satisfied. Rapid New Auto Loan Growth

21 21 Credit union used-auto loan balances grew at a 14.9% seasonally-adjusted annualized growth rate in April, the fastest pace since September 1997. April’s seasonal factors usually add 0.22 percentage points to the underlying trend growth rate. The used auto buying and lending season begins in March and runs through September. Rapid Used Auto Loan Growth

22 22 Credit card loan balances grew at a 4.5% seasonally-adjusted annualized growth rate in April, due to low gas prices reducing the amount of credit used at gas stations. April’s seasonal factors usually add 0.07 percentage points to the underlying trend growth rate. The outlook for credit unions’ credit card lending is positive because of strong consumer fundamentals like the improving labor market, rising home and stock values, faster wage growth, and greater access to credit. Slowing Credit Card Growth

23 23 Credit union home equity loan balances grew at a 10.4% seasonally-adjusted annualized growth rate in April, due to rising home prices and improving consumer confidence. April’s seasonal factors usually add 0.34 percentage points to the underlying trend growth rate as homeowners use home equity loans to pay tax bills. Home equity loan balances will remain strong due to rising home prices, the improving job market, rising consumer confidence, consumers releasing pent up demand for durable goods, and low interest rates. Rising Home Equity Loan Growth

24 24 Credit union fixed-rate first mortgage loan balances grew at a modest 6.1% seasonally-adjusted annualized growth rate in April. April’s seasonal factors shave off 0.28 percentage points from the underlying trend growth rate. Credit union purchase mortgage originations should increase 15% in 2015 as housing demand recovers and refi activity increases slightly. A stronger labor market and rising wages will give more potential homebuyers the wherewithal to purchase a home. Moreover, fading memories of the housing bust will give homebuyers the confidence and willingness to purchase a home. Modest Fixed-Rate First Mortgage Growth

25 25 Credit union adjustable-rate first mortgage loan balances grew at a strong 13% seasonally-adjusted annualized growth rate in April. April’s seasonal factors usually add 0.60 percentage points to the underlying trend growth rate. Credit unions are placing more adjustable- rate mortgages on their books in preparation of the Federal Reserve raising short-term interest rates in the third quarter of this year. Strong Adjustable-Rate First-Mortgage Growth

26 26 Credit Union Investments Section Surplus Funds Yield on Surplus Funds Investment Maturities Liquidity flows Surplus Funds Distribution

27 27 Surplus funds fell to 33.2% of assets in April, and below the 35.7% in April 2014. Investments as a percent of assets fell over the last 2 years as loans growth accelerated. Loans now make up almost 63% of assets, up from the cyclical low point of 57% set in March 2013. The yield on surplus funds rose to 1.16% in Q1 2015, up from 1.13% in Q1 2014. Loan yields fell to 4.67% in Q1 2015, the lowest in credit union history, from 4.94% in Q1 2014. With loan balances expected to grow another 11% this year ($76.4 billion), expect surplus funds as a percent of assets to fall below 30% by year end, the lowest level of liquidity since February 2009. Investments Are Falling But Yields Are Rising

28 28 Surplus funds with a maturity less than 1 year rose to 46.8% in April 2015, up from 42.3% during April 2014. The yield curve slope flattened in April (as measured by the difference between the 3-year Treasury interest rate and the fed funds interest rate) led to a greater share of investments invested short term. Rising Investment Maturities as Yield Curve Steepens

29 29 Credit union investment dollars fell -$3.8 billion in April to help fund a $7.5 billion increase in loan. Credit unions drained their liquidity, however, during the last 12 months to fund a record $72.4 billion jump in loan balances. The rest of funding for the loan increase came from a $45.4 billion increase in deposits, a $8.8 billion increase in borrowings and a $10.4 billion jump in capital. The Great Recession and the associated corporate credit union goings-on caused a shift in the composition of surplus funds. In 2007, credit unions held 33% of their surplus funds in shares/deposits at corporate credit unions. Today, only 5.6% of cash and investments are held at corporate CUs. Federal Agency Securities Are Lions Share of Investments From 1 month agoFrom 1 year ago

30 30 Credit Union Savings Section Total Savings Savings Distribution Savings Interest Rates Regular Share Share Draft Money Market Account Share Certificate Borrowings

31 31 Savings balances rose 4.4% in 2014, up from 3.6% in 2013. This modest underlying trend growth is being fueled by low gas prices, rising household income, strong job growth, and fast membership growth. Savings balances are expected to grow 4% in 2015 and only 3% in 2016 as members use more savings for purchases and higher interest rates lead rate-sensitive members to transfer funds to money market mutual funds. Savings growth disparity is rather large. In the last 12 months ending in Q1 2015, credit unions with assets greater than $1 billion reported a 5.9% increase in savings balances versus credit unions with assets less than $20 million reported savings growth of only 0.4%. Slower Saving Growth in 2015 and 2016

32 32 Regular shares made up 35.1% of total savings in Q1 2015 as members prefer short-term liquid deposits. This is the highest percentage since 2005. Members anticipate the Federal Reserve will raise interest rates soon, and therefore do not want to lock up their funds in term deposits. Credit union CD interest rates are slowly rising as liquidity tightens at many credit unions reporting strong loan growth. With the Federal Reserve expected to raise the fed funds interest rate in Q4 2015, expect credit union CD and money-market account interest rates to rise this fall. Short-term Liquid Funds Dominate Savings Mix

33 33 Credit union savings balances grew at a 3.6% seasonally-adjusted annualized growth rate in April, due mainly to falling oil prices putting more money in members’ pockets. April’s seasonal factors typically subtract -0.47 percentage points from the underlying savings trend growth. Modest Saving Growth as Gas Prices Fall

34 34 Credit union regular share balances grew at a 7.0% seasonally-adjusted annualized growth rate in April, due mainly to falling oil prices putting more money in members’ pockets. Seasonal factors (members’ tax payments) typically subtract -0.51 percentage points from the underlying regular shares trend growth. Rapid Regular Share Growth

35 35 Credit union share draft balances grew at a 7.1% seasonally-adjusted annualized growth rate in April, due mainly to falling oil prices putting more money in members’ pockets. Seasonal factors (members’ tax payments) typically subtract -0.81 percentage points from the underlying share draft balance trend growth. Rapid Share Draft Growth

36 36 Credit union money-market account balances grew at a 3.5% seasonally-adjusted annualized growth rate in April, due mainly to falling oil prices putting more money in members’ pockets. April’s seasonal factors (members’ tax payments) typically subtract -1.09 percentage points to the underlying money-market account balance trend growth. Slow Money-Market Account Growth

37 37 Credit union share certificate balances fell at a -0.7% seasonally-adjusted annualized growth rate in April. April’s seasonal factors typically add 0.04 percentage points to the underlying share certificate trend growth. Members will begin shifting funds from regular shares to CDs and money-market mutual funds when short-term interest rates rise later this year Resurgent Share Certificate Growth

38 38 Credit union IRA balances fell at a -4.0% seasonally-adjusted annualized growth rate in April. April’s seasonal factors typically add 0.06 percentage points to the underlying IRA balance trend growth. Falling IRA Growth

39 39 Credit union wholesale borrowings grew at a 36.1% seasonally-adjusted annualized growth rate in March. April’s seasonal factors (members’ tax payments) typically add 2.46 percentage points to the underlying borrowings trend growth. Credit unions are turning more and more to wholesale funds to help fund some of the recent surge in loan demand. Resurgent Borrowings

40 40 Credit Union Earnings Section Return on Equity Yield on Assets Cost of Funds Net Interest Margin Operating Expenses Fee Income Other Income Provision for Loan Loss Net Income Capital Ratio Asset Growth

41 41 Credit union return-on-equity ratios rose to 9% in 2014, the highest since 2002. A higher ROE ratio allows for faster asset growth, which then leads to lower operating expense ratios, higher profit margins, and ultimately greater earnings. The disparity between large and small credit unions’ return-on-equity ratios remained large in 2014. Credit unions with assets exceeding $1 billion reported ROE ratios of 9.5%, more than twice that reported by credit unions with assets less than $100 million. Rising Return on Equity

42 42 Credit union loan growth of 11-10% in 2015-16 will shift assets away from low yielding investments and into higher yielding auto and mortgage loans. This will push credit union assets yields above the record low of 3.36% set in 2014. Faster economic growth in 2015 will put upward pressure on interest rates with the 10-year Treasury crossing over 2.5%. This will push mortgage rates up and boost earnings. The Fed will raise the fed funds interest rate in the fall of 2015 raising the yields on short-term credit union investments. Aggressive loan pricing by banks returning to the consumer lending arena will, however, lower net returns on some loans Rising Yield on Assets

43 43 Rising short-term interest rates in 2015 will increase credit union cost of funds from the record low mark of 0.54% set in 2014. The rise will be modest as excess liquidity will allow deposit interest rates to lag increases in market interest rates. With almost all member certificate of deposits repriced to today’s low interest rates, the funding cost increase will come sooner than it did during the last rising interest rate cycle of 2004. Rising interest rates will encourage members to shift funds out of core deposits and into higher yielding money-market accounts, a liability mix effect. Rising Cost of Funds

44 44 Net interest margins will increase over the next two year due to strong loan growth and rising market interest rates. Credit union net interest margins reached the lowest in history in 2013 due to historically low interest rates and excess liquidity. Deregulation over the last 30 years has increased competition in the financial services arena, resulting in lower net interest margins. For an individual CU, margins will also be determined by local market demographics: population growth, median household income, local industry, age trends. Margin compression is forcing CUs to increase the array of financial products and services offered while at the same time boosting efficiency and productivity. Rising Net Interest Margins

45 45 Operating expense ratios will decline slightly over the next 2 years as the growth rate in assets exceed that of operating expenses. Corporate stabilization assessments are expected to be zero in 2015 and 2016 because the combination of corporate capital written off ($5.6 billion) and total assessments paid to date ($4.8 billion) is close to what the losses are likely to be. NCUSIF premiums are expected to be zero in 2015 due to a build up of reserves for insurance losses and less CU failures. However, credit unions will experience rising compliance costs for new Dodd-Frank Act regulations and new Consumer Financial Protection Bureau rules. Falling Operating Expense Ratios

46 46 Fee income as a percent of average assets will continue its 7 year decline as the economic recovery lowers penalty fees. Moreover, web and mobile banking is providing members easier access to account balance information which reduces penalty fees. Fees from checking accounts serves as the single largest source of credit unions’ fee income. The average percentage of fee income derived from nonsufficient funds (NSF), overdraft, and courtesy pay fell to 34% in 2013. The CFPB’s expected focus on checking/ODP in 2015 puts a big income stream at risk, and continuing issues with overdraft revenue could prove challenging. Falling Fee Income Ratios

47 47 The end of the mortgage refinance boom will reduce loan origination fees and “gains on sale” of mortgages over the next 2 years. Interchange income may decline in 2015 if interchange rates fall more than the increase in card transactions. Merchants have incentives to move customers to new alternate low-cost payment systems, reducing the market power of the card networks. The interchange fee cap rule (October 1, 2011) capped the maximum fee charged per debit card transaction to 21 cents (plus an additional 2-3 cents for fraud prevention) for institutions greater than $10 billion. Stable “Other Income” Ratios

48 48 Provision for loan loss ratios will increase slightly in 2015 and 2016 due to strong loan growth. But falling loan net charge-offs, tight underwriting standards, an improving labor market, rising home prices and a still overfunded allowance for loan loss account will keep loan loss provisions below long term levels. Many credit unions still have over-funded allowance for loan losses. leading to provisions lower than net chargeoffs over the last few years. Home prices are expected increase 4% in 2015, reducing the number of mortgages at risk of foreclosure. Rising Provisions for Loan Loss Ratios

49 49 Credit union return-on-asset ratio will remain at 0.80% in 2015 and 2016. Rising asset yields – due to faster loan growth and modestly higher market interest rates - will slightly outpace higher funding costs, raising net interest margins. Expect loan loss provision expense to rise but operating expense ratios to fall. The disparity between large and small credit unions return-on-asset ratios remained large in Q1 2015. Credit unions with assets exceeding $1 billion reported ROA ratios of 0.95, more than twice that reported by credit unions with assets less than $100 million. Stable Return-on-Asset Ratios Corporate Stabilization Expense (basis points of average assets) 2009 = 3 bps 2010 = 11 bps 2011 = 18 bps 2012 = 7 bps 2013 = 6 bps

50 50 Credit union capital-to-asset ratios will continue to rise in 2015 and 2016 as capital accumulation outpaces asset growth. Credit unions continue to build their buffers above the 7% target considered to be “well capitalized” under NCUA’s Prompt Corrective Action rule. By the end of 2016, capital ratios will approached the record high set back in 2006. Rising Capital Ratios

51 51 Asset growth is expected to slow in 2015 and 2016 as deposit growth slows. Asset growth will outpace savings growth by one percentage point, however, due to borrowings rising 30% and capital rising 9%. The average credit union asset growth of 5.6% in 2014 masked a wide growth rate disparity between large and small credit unions. During the last 12 months ending in Q1 2015, credit unions with assets greater than $1 billion reported asset growth of 7.4% while credit unions with assets less than $20 million reported asset growth of 0.5%. Slowing Asset Growth and Wider Inequality

52 52 Credit Unions & Members Section Number of Credit Union Credit Union Members

53 53 As of April 2015, CUNA estimates 6,413 credit unions were in operation, 11 fewer than March. During the last 12 months the number of credit unions fell by 309, above the 301 annual decline set one year ago. The pace of consolidation in the credit union system is accelerating due to the following factors: retiring baby-boomer CEOs, rising regulatory/compliance burden, record low net interest margins, rising concerns over scale and operating efficiency, rising competitive pressures and members’ demand for ever more products, services and access channels Credit Union Consolidation Accelerates Number of CUs April 2015 = 6,413

54 54 Credit unions should expect membership growth to exceed 3% in 2015 and 2016 due to strong job growth. This will push the total number of credit union memberships to 104.5 million by year end 2015, which is equal to 33% of the total U.S. population. In the last 12 months ending in Q1 2015, credit union with assets over $1 billion reported 5.8% membership growth, compared with less than 1% for credit unions with assets less than $100 million. The 3,038 credit unions with assets less than $20 million reported a 1.6% decline in memberships. Membership Growth Surges

55 55 Credit union memberships grew at a 4.3% seasonally-adjusted annualized growth rate in April. April’s seasonal factors typically have no effect on the underlying membership trend growth. The membership gain is driven by the rapid pace of new job creation the tremendous growth in credit union auto lending Rapid Membership Growth

56 56

57 57

58 58 The Credit Union versus Human Heart Analogy Banks and Credit Unions are to the economy what the heart is to the human body Money  Blood Deposits  Deoxygenated (blue) Blood Loans  Oxygenated (red) Blood (Loans like blood lead to productive outcomes) Loan departments collect information  Lungs collect oxygen Capital  Heart Muscle Banks/CUs Allocate Capital  Aorta Artery Allocates Blood (to Most Productive Use) Toxic Assets/Loans (MBS)  Plaque Banking Crisis  Heart Attack Government Intervention  Defibrillator $2.6 Trill Excess Reserves/Cash  Atrial Fibrillation (Atrium Blood Pooling) (False Economic Signals  Abnormal Electrical Signals)


Download ppt "CUNA Mutual Group Proprietary Reproduction, Adaptation or Distribution Prohibited © CUNA Mutual Group Economic & Credit Union Monthly Update June 2015."

Similar presentations


Ads by Google