Wednesday, May 20, 2020

Moody's Analytics: The Road Ahead for Credit Unions

A webinar by Moody's Analytics looks at the impact of COVID-19 on credit unions.

Here are some insights from the webinar.

Moody's Analytics expects auto and unsecured balances at credit unions to decline. However, mortgage balances are expected to grow.

Credit union default rates on consumer loans will trail initial unemployment claims by six months to one year. This would mean loss rates will peak toward the end of this year or in the first half of next year.

Auto loans are an area of concern. Gross loss rates on auto loans at credit unions will peak at around 3.5 percent, which will be above loss rates during the financial crisis.

According to the webinar, loss rates on credit cards will be in unchartered territory and will come quickly, especially at the largest credit unions.

Click here to watch the webinar.

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