Smart Borrower Blog

Credit Unions Look To Expand Auto Lending in 2014


Apr 24th, 2014 @ 7:07 PM by Amber Nelson


When credit union executives were asked recently what the most significant issue facing credit unions is, loan growth was the answer for a large majority – 72 percent. And increasing the number of auto loans seems to be the easiest way to tackle the challenge, according to the same survey from credit data collection firm TransUnion.

TransUnion conducted a survey at a February industry conference in Washington D.C. with responses from 64 credit union executives. When it comes to increasing their volume of loans, 57 percent of credit union leaders are feel that government regulation is one of their biggest challenges with new laws hampering their profitability and efficiency. Thirty-three percent felt that expanding their membership numbers was one of the top obstacles to loan growth while 54 percent said that competition and the need to expand their market share is the biggest hurdle to overcome.

When asked how to increase loan volume in 2014, 57 percent believed that car loans will provide the biggest potential for loan growth in 2014. Deposit accounts were a distant second in terms of opportunities for increases.

Car loan debt has already been trending upward. A separate survey from TransUnion found that auto debt per-borrower grew to $16,769 in the last quarter of 2013, up from the previous year when it averaged $16,060 and making the 11th straight quarterly increase. And even though delinquency rates rose slightly to 1.14 percent in the fourth quarter of 2013 from 1.09 percent during the same quarter of 2012, rates are still near all-time lows.

“With delinquency rates at historic lows and consumers prioritizing auto loans above other credit instruments, credit union executives continue to view auto loans as a significant driver of near-term growth,” said David Dodson, credit union vice president in TransUnion’s financial services business unit in a statement. “Credit union members should anticipate strong auto loan financing offers throughout 2014.”

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

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