2Q21 Credit Union Trends and Takeaways

More than 1,200 industry peers joined us on Aug. 11 for 2Q 2021 Trendwatch. Callahan highlighted trends in lending, membership, and more as behavior amongst credit union members changed in accordance with the steady economic reopening. Most notably, credit union assets topped $2 trillion for the first time as industry assets grew 13.2% year over year.

Lending saw some of the more dramatic changes. During the second quarter of 2021, the following trends emerged:

• Credit unions are supporting economic recovery by lending to members at an unmatched pace. Total year-to-date loan originations increased by more than 20% in dollar terms over each of the past two years.
• Credit unions originated 22.5 million loans for $388.4 billion in the first half of 2021, including a record $206.7 billion in the second quarter. As recently as 2014, the credit union industry had never collectively generated $388.4 billion in loan volume throughout a full calendar year, let alone over six months.
• While 1st mortgages drove loan originations over the first six months of last year, consumer lending – consisting predominantly of auto loans and revolving credit – is surging in the first half of 2021, outpacing 1st mortgage origination growth over the same period. Although the mortgage market remains hot in our low-interest-rate environment, the rebound of consumer lending is a hopeful sign for a recovering economy.
• Strong origination performance is starting to convert to balance sheet growth, as outstanding loan balances expanded over the second quarter across all major loan products.
• The industry’s loan-to-share ratio increased between March and June for the first time since the third quarter of 2019, as credit unions utilized some of their liquidity to meet member loan demand.

Year-to-date loan origination totals ($) increased by double digits annually in every major reported loan category between the first half of 2020 and the same period in 2021.

Membership and saving trends were also Trendwatch highlights. A total of 5.1 million Americans joined a credit union in the past 12 months, as membership expanded 4.1% year over year to reach a total of 128.8 million.

Meanwhile, total share balances increased $228.6 billion (15.2%) over the past year. Notably, member checking account balances have jumped 32% since last June as more than six in 10 members have checking accounts at their credit union today.

Credit unions have both increased total membership and deepened existing relationships over the past year. The average member relationship grew $1,130 over the past twelve months.

“Credit unions continue to provide a growing proportion of the American public with responsible and timely financial products and services. The challenges of the resurging pandemic lay before all of us, but the experience gained so far since COVID-19 began and the century-long foundation on which the member-owned financial cooperative rests give me confidence that together, the movement can again help millions of members weather the storm,” said Jon Jeffreys, president and CEO of Callahan & Associates.

A recording of the Aug. 11 Trendwatch can be viewed here. Click here for more takeaways from a Callahan analyst.

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