Overall Lending at Georgia Credit Unions Was Up in Q1

Allie Jackson

Friday, June 19th, 2015

Consumer borrowing was up the first quarter of 2015 at Georgia's 133 credit unions, although the rate of increase has slowed somewhat from the fourth quarter.  

Vehicle lending remained the top performer for the state's credit unions to start 2015, with new auto loans posting a 7.2 percent gain over the last quarter of 2014 and used auto loans growing by 2.7 percent. Also finishing in the positive were business and first mortgage loans, which had increases of 1.5 percent and 1.4 percent respectively.  

Total lending at Georgia credit unions increased 1.8 percent in the first three months of 2015, a slight decline from a 2 percent increase the last quarter of 2014.  

Georgians were paying down their debt in the first part of the year - a typical pattern following the holiday season. Credit card balances fell by 5.2 percent the first quarter of 2015 compared to the fourth quarter of 2014. Other unsecured loans were down 3.6 percent and second mortgage loans decreased by 2.1 percent.  

Used car pricing is one of the economic indicators economists take into consideration when measuring the health of the economy. Although automotive industry reports note values for used cars are falling - alluding to a potential slowing economy - Georgia consumers benefited from overall positive economic conditions in the first quarter of 2015: 

  • More people are working in Georgia. The unemployment rate continued its downward trend, ending the quarter at 6.3 percent. 
  • Along with more work came fewer bankruptcies. Georgia credit union borrower-bankruptcy filings fell by more than 10 percent in the first quarter of 2015. 

Georgia credit unions continue to offer financing advantages on a variety of loans. 

According to data collected by Informa Research Services, the current average rate on a 4-year used vehicle loan at the state's credit unions averages 1.30 percentage points lower than the comparable rate at Georgia banks. On a $20,000 used auto loan, the credit union advantage saves the Georgia consumer more than $500 in four years.

"Despite the indication that automobile lending has somewhat slowed from the last quarter of 2014, credit unions are guardedly optimistic about the economy," said Mike Mercer, President and CEO of Georgia Credit Union Affiliates. "While the numbers show a softened growth, overall lending - including vehicle loans - at Georgia credit unions remained positive. A testament to benefits members receive from the credit union difference." 

In conjunction with the healthy economy, total Georgia credit union savings balances experienced a rapid upswing in the first quarter, growing by 3.8 percent. With interest rates remaining at historic lows, the trend towards short term liquid accounts continued.  

Georgia's steady workforce contributed to individual account balance growth. Credit union checking account balances grew 8.1 percent in the first quarter of 2015, while regular savings balances were up 6.1 percent and money market account balances increased 2.7 percent. 

Membership tops 2 million in Georgia credit unions, which are not-for-profit, member-owned financial service providers serving a broad cross-section of consumers. As cooperative institutions, credit unions return earnings to their members in the form of lower interest rates on loans, higher savings deposit yields and fewer and lower fees compared to banks. As confidence in the economy continues its upward trend, more Georgia consumers are choosing credit unions as their best financial partner. 

This information is based on data from Georgia credit unions that collectively serve 90 percent of the members and manage 94 percent of the assets in credit unions throughout the state. Credit Union National Association (CUNA) collects the data from the National Credit Union Administration each year. The information is then compared to state banks (information gathered by Informa Research Services). 

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