NCUA Q2 2023 Data: Slight Rise in Michigan Memberships and Loan Portfolios during a Two-Year Low in Inflation
In the second quarter of 2023, the Federal Reserve continued its efforts to bring inflation down following the historic 9.1% rise that happened one year ago. It was largely successful, as inflation, measured by the Consumer Price Index, slowed during the quarter. Prices rose 3.1% in the year ending June – the lowest 12-month increase in 27 months.
Additionally, a surprisingly strong labor market at the national level continued to fuel healthy U.S. economy activity.
According to the National Credit Union Administration, with national credit union loans growing and savings balances declining, the movement’s loan-to-savings ratio increased from 80.9% to 83.1% in the quarter. In other words, credit unions are challenged with tight liquidity – a situation that is unlikely to change meaningfully over the next year.
Also, smaller credit unions saw earnings results improve during the quarter due mostly to stronger demand in the unsecured lending arena and ample liquidity.
In Michigan, memberships rose by 0.3% in Q2, or a gain of nearly 18,000 members, which lands total Michigan credit union memberships at 5.99 million. Full year growth ending in June 2023 was 1.9%.
Membership growth by region (for trailing 12 months):
Grand Rapids: 6.1%
Traverse City: 3.8%
Michigan credit union loan portfolios saw a 2.8% increase (or 15.2% annualized), which is up slightly from the Q1 2023 rate of 2.7% and above the national rate of 2.2%.
Q2 loan growth by type (for trailing 12 months):
Member business loans: 23.5%
New auto: 18.6%
Used auto: 12.2%
Credit cards: 12.6%
First mortgage: 11.1%
HEL & 2nd Mtg: 37.8%
Other unsecured loans: 24.0%
Loan growth by region (for trailing 12 months):
Grand Rapids: 26.7%
Traverse City: 12.2%
CUNA’s Q2 Member Benefits Report for 2023 shows that Michigan credit unions contributed a total of $736 million in direct financial benefits to Michigan’s 5.99 million members over the previous twelve months.
That means, according to CUNA, credit union members financing a $25,000 vehicle for five years will save an average of $122 per year in interest when compared to banking institutions.
These benefits translate to $125 per member or $262 per household. These figures are calculated based on average savings differences between credit union and bank pricing. They result from financial benefits, such as higher CD rates and fee-free checking, as well as lower rates and fees on products like home and auto loans.
“The Q2 data from the NCUA reports healthy net worth ratio and steady membership growth for the national credit union movement and slowed inflation in the U.S. economy, which is welcome news for the approximately six million Michiganders our movement serves,” said MCUL President/CEO Patty Corkery. “The $736 million in direct financial benefits in Michigan, per CUNA, means consumers are able to save more simply by being a credit union member. The League is pleased to see that, since Q2, 18,000 more people have been able to take advantage of the credit union difference.”
Find the complete Q2 2023 NCUA Call Report Data here.
You can also find more Q2 data on Michigan credit unions’ low rates and high dividends in the CUNA Q2 Member Benefits Report.