Credit Unions Keep Growing ... and Safely, Too!

Just like banks, credit unions are growing these days … and doing so safely. That’s because favorable regulatory changes, overall economic stability, and low unemployment are boosting loan demand and suppressing delinquencies and defaults.

What’s more, credit unions are exempt from federal taxes. That allows them to re-invest more dollars back into their own operations, something that can lead to reduced interest rates for consumers like us. That means you may find that a local credit union is your best bet for a loan on a new car, used car, or home.

Let’s look at the numbers from our Weiss database. They show that total industry loans have grown $92.5 billion, or 11.1%, over the last year, and $28.4 billion, or 3.2%, quarter-over-quarter.

Let’s look at the numbers from our Weiss database. They show that total industry loans have grown $92.5 billion, or 11.1%, over the last year, and $28.4 billion, or 3.2%, quarter-over-quarter.

Residential mortgages account for the largest portion of loan portfolios, with $375.8 billion in outstanding balances as of Q2 2017. That was up 10.7% year-over-year and 2.6% quarter-over-quarter.

Auto lending is also a big business for credit unions, particularly loans on used cars. There were $195.5 billion in such loans outstanding at the end of the second quarter, almost $70 billion more than loans on new cars.

You can see how loan balances in all three major lending areas have changed over the last several quarters in the graph below. We haven’t seen drastic growth. But that can be a good thing, as overly aggressive growth can lead to problems (like we saw with mortgage lending in the mid-2000s).

With growth in loans comes growth in overall assets. The credit union industry’s assets grew 8.3% over the last year, and 0.9% since Q1 2017. They currently stand at $1.39 trillion.

If you’re curious about who the biggest players are, here’s a list of the top ten largest U.S. credit unions by assets. Industry leaders such as Navy Federal Credit Union (Rated “A”), State Employees’ Credit Union (Rated, “B-”), and Pentagon Federal Credit Union (Rated “B+”) have a combined $140 billion in assets, representing 10.1% of the industry.

10 Largest Credit Unions by Assets

What’s more, all of them have a “B-” or higher safety rating. That suggests they offer consumers like you a safe place to keep your money. But if you’re thinking about joining one and want to see if it’s solid … or if you’re already a member and want to make sure nothing changes down the road … be sure to check the safety ratings we offer at the Weiss Ratings website.

Think Safety,

Remi Lukosiunas

Money and Banking Edition, By Remi Lukosiunas, Financial Analyst Remi Lukosiunas, a Financial Analyst, joined Weiss Ratings in 2014 with a financial services background in internal audit and the credit union industry. Remi conducts banking, credit union, insurance and investment research. He has also written extensively on stocks and investing using ratings as a guide. Remi is a graduate of Florida State University with a degree in multinational business.