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A new report from the National Credit Union Administration (NCUA) finds that loan delinquencies and charge-off rates are rising at the nation’s CUs.
Much of this is due to a happy development: credit union lending has risen by a healthy amount recently.
In fact, loans outstanding were up 10.7% in the year ending in the first quarter of 2016. Total loans reached $799.5 billion at the end of the first quarter, NCUA said.
New auto loan originations rose 15.4%, accounting for the biggest part of the overall increase. Used auto loans were up by 13.2%.
CUs are lending more to member businesses. These loans grew by 13%.
Mortgage lending is also up, by 10.4%.
CUs are also more active in the controversial payday lending space, with these types of loans up by 8.1%. Payday lending typically brings with it relatively high delinquency rates.
What does all this mean for members?
Rising loan delinquency rates may prompt lenders – including CUs -- to become a bit more strict with their approval thresholds. It may become harder to get approved for a loan in the near future.
By all means, do everything you can to build your credit score and “keep your nose clean” when it comes to your credit-worthiness.
As you know, credit unions are looking after the money of all members. If you’re planning a big purchase in the future (house, car), do everything you can to get your credit score as high as you can.
You might also be interested in: Four Critical Elements to Your Credit Union Growth
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