Trend Analysis: Credit Union Loan Activity in Recent Months

National Trends:

• Overall Growth: Nationally, credit unions saw a 6.4% increase in total loans, with total assets amounting to $1.60 trillion, suggesting a healthy demand for lending services.
• Focus on Housing: The significant growth in residential loans, which rose by 7.3% to $708.1 billion, underscoring the ongoing resilience of the housing market.
• Concern over Delinquencies: Despite growth, there's an uptick in delinquency rates to 83 basis points, hinting at emerging financial stress among borrowers.

Virginia-Specific Trends:

• Robust Auto Loan Performance: Virginia stood out with its remarkable growth in new auto loans, indicating strong consumer confidence in auto financing.
• Credit Card Delinquencies: The credit card delinquency rate in Virginia for Q4 2023 was 2.94%??. This rate is significantly higher than the national average of 0.83%??, highlighting a specific increase in credit card delinquencies within the state. This regional trend indicates more pronounced financial stress among Virginia's credit union members compared to the national average.

Comparative Insights:

• Similarities and Differences: Both nationally and in Virginia, there's growth in loan activities, though the focus areas differ. While national trends highlight housing loans, Virginia shines in auto loans, indicating a possibly stronger auto market locally.
• Savings Rate Disparity: Another unique challenge facing Virginia is the lower growth rate in savings deposits, which increased by just 1.2% compared to the national growth rate of 3.4%. This slower growth rate in savings might suggest differing financial priorities or economic pressures faced by Virginians, impacting their ability to save.

The trends observed in Q4 2023 serve as a guidepost for future planning. Virginia’s credit unions are advised to leverage their community-focused approach to address both the rising demand in auto loans and the challenges posed by credit card delinquencies. Enhanced financial education and member support programs could mitigate risks and bolster loyalty. This dual approach ensures credit unions remain competitive and responsive, reinforcing their position as pivotal financial stewards in their communities.