S&P Global Market Intelligence is reporting that mortgage originations at credit unions was up almost 30 percent in 2019.
According to Home Mortgage Disclosure Data, credit union originated $177.3 billion in home mortgages in 2019. This was up from approximately $137 billion in 2018.
However, credit union market share of mortgages slipped from 6.9 percent in 2018 to 6.7 percent in 2019.
Navy Federal Credit Union (Vienna, VA) was the top credit union mortgage originator in 2019 funding $19.78 billion in mortgages. This was up 20.3 percent from the prior year. Navy FCU is the 19th largest mortgage lender in 2019.
Read more.
Showing posts with label Credit Union Practices. Show all posts
Showing posts with label Credit Union Practices. Show all posts
Wednesday, July 29, 2020
Friday, July 24, 2020
CEOs at Large State Chartered CEOs Earned 12.5 Times Average Employee Compensation
In 2018, Chief Executive Officers at state chartered credit unions with at least $1 billion in assets earned on average 12.5 times the average compensation of their employees.
The median ratio of CEO compensation to average credit union employee compensation was 10.99.
To calculate average credit union employee compensation, the analysis divided the Call Report line item Employee Compensation & Benefits by Full Time Equivalent Employees. Full Time Equivalent Employees = The Number of Full Time Employees + (0.5 times the Number of Part Time Employees).
The following table lists the 10 credit unions with the highest ratio of CEO compensation to average employee compensation. Elizabeth Dooley of Educational Employees Credit Union (Fresno, CA) had the highest ratio of CEO compensation to average employee compensation at 41.28.
However, this data should not be used to compare the compensation of bank CEOs to their employees. The information reported by publicly-traded banks uses median employee pay, while this analysis substitutes average employee compensation for median compensation, because median compensation is not available.
Median employee compensation would be lower than average employee compensation. In other words, if median compensation was used, the ratio of CEO compensation to median employee compensation would be higher.
The median ratio of CEO compensation to average credit union employee compensation was 10.99.
To calculate average credit union employee compensation, the analysis divided the Call Report line item Employee Compensation & Benefits by Full Time Equivalent Employees. Full Time Equivalent Employees = The Number of Full Time Employees + (0.5 times the Number of Part Time Employees).
The following table lists the 10 credit unions with the highest ratio of CEO compensation to average employee compensation. Elizabeth Dooley of Educational Employees Credit Union (Fresno, CA) had the highest ratio of CEO compensation to average employee compensation at 41.28.
However, this data should not be used to compare the compensation of bank CEOs to their employees. The information reported by publicly-traded banks uses median employee pay, while this analysis substitutes average employee compensation for median compensation, because median compensation is not available.
Median employee compensation would be lower than average employee compensation. In other words, if median compensation was used, the ratio of CEO compensation to median employee compensation would be higher.
Friday, July 17, 2020
Digital Divide Between Large and Small CUs in the Age of COVID-19
S&P Global Market Intelligence is reporting that larger credit unions are increasing their investment in electronic services leading to a digital divide between large versus small credit unions.
The fallout from COVID-19 is underscoring the need to adopt electronic banking services as a vehicle to connect to members/consumers, as many branches closed their lobbies.
Mobile-based banking services offered by credit unions have steadily gained ground on internet-based banking services in recent years.
For example, 77.3 percent of credit unions offered internet-based banking, while only 48.7 percent provided mobile-based banking services. However, by the first quarter of 2020, the percent of credit unions offering internet-based banking and mobile-based banking services was 79.8 percent and 65.9 percent, respectively.
However, mid-sized and large credit unions are offering the most electronic financial services and are the most tech-savvy.
Over 97 percent of credit unions with more than $100 million in assets offer mobile banking services. But just over half of credit unions with less than $100 million in assets offer such services.
S&P Global Market Intelligence noted that there is a significant gap in e-signature authorizations between smaller credit unions, at 19.01 percent, and mid-sized and large institutions at 63.41 percent, and 70.06 percent, respectively.
Only 41.61 percent of the smallest credit unions permitted new loans to be originated electronically, compared to 92.38 percent of mid-sized credit unions and 95.76 percent of the biggest institutions.
The article makes it clear that these larger credit unions are better positioned to make the investments in technology than smaller institutions.
Read more.
The fallout from COVID-19 is underscoring the need to adopt electronic banking services as a vehicle to connect to members/consumers, as many branches closed their lobbies.
Mobile-based banking services offered by credit unions have steadily gained ground on internet-based banking services in recent years.
For example, 77.3 percent of credit unions offered internet-based banking, while only 48.7 percent provided mobile-based banking services. However, by the first quarter of 2020, the percent of credit unions offering internet-based banking and mobile-based banking services was 79.8 percent and 65.9 percent, respectively.
However, mid-sized and large credit unions are offering the most electronic financial services and are the most tech-savvy.
Over 97 percent of credit unions with more than $100 million in assets offer mobile banking services. But just over half of credit unions with less than $100 million in assets offer such services.
S&P Global Market Intelligence noted that there is a significant gap in e-signature authorizations between smaller credit unions, at 19.01 percent, and mid-sized and large institutions at 63.41 percent, and 70.06 percent, respectively.
Only 41.61 percent of the smallest credit unions permitted new loans to be originated electronically, compared to 92.38 percent of mid-sized credit unions and 95.76 percent of the biggest institutions.
The article makes it clear that these larger credit unions are better positioned to make the investments in technology than smaller institutions.
Read more.
Saturday, June 27, 2020
CDC Posts Information for Banks and CUs for Keeping Employees Safe from COVID-19
The Centers for Disease Control and Prevention (CDC) has posted webpages for banks and credit unions and their employees with tips for protecting staff and slowing the spread of COVID-19.
The tips for bank employers include creating a COVID-19 workplace health and safety plan, conducting a hazard assessment and developing hazard controls.
Among these controls are engineering controls (isolating workers from hazards through workspace distancing and transparent shields, as well as adjusting HVAC ventilation and adding filtration) and administrative controls (including changing workflows and practices, cleaning facilities and encouraging cloth face coverings as appropriate).
Read the bank employee page.
Read the bank employer page.
The tips for bank employers include creating a COVID-19 workplace health and safety plan, conducting a hazard assessment and developing hazard controls.
Among these controls are engineering controls (isolating workers from hazards through workspace distancing and transparent shields, as well as adjusting HVAC ventilation and adding filtration) and administrative controls (including changing workflows and practices, cleaning facilities and encouraging cloth face coverings as appropriate).
Read the bank employee page.
Read the bank employer page.
Thursday, June 25, 2020
Teachers CU Discusses Growth Plans
The CEO of Teachers Credit Union (South Bend, IN) outlined the credit union's expansion plans in MiBiz.com.
In the article, the CEO of Teachers Credit Union stated that the credit union was a Midwest powerhouse.
Indiana's largest credit union is looking to grow strategically into contiguous states of Ohio, Michigan, Kentucky, and possibly Illinois, as well as expanding its presence in Indiana.
The credit union wants to double its footprint over the next decade with between 33 percent to 40 percent of its business coming from Michigan.
The credit union will consider acquisitions, buying branches from other financial institutions, or new office development as potential vehicles to further its expansion plans into new markets.
Read the article.
In the article, the CEO of Teachers Credit Union stated that the credit union was a Midwest powerhouse.
Indiana's largest credit union is looking to grow strategically into contiguous states of Ohio, Michigan, Kentucky, and possibly Illinois, as well as expanding its presence in Indiana.
The credit union wants to double its footprint over the next decade with between 33 percent to 40 percent of its business coming from Michigan.
The credit union will consider acquisitions, buying branches from other financial institutions, or new office development as potential vehicles to further its expansion plans into new markets.
Read the article.
Tuesday, May 19, 2020
MidFlorida CU's Car Repossession Gets Unwelcomed Media Scrutiny
An investigative reporter for WFLA News Channel 8 was called about Lakeland, Florida-based MidFlorida Credit Union's repossession of a nurse's car.
The nurse was told her car was repossessed due to missed payments. But she was not able to get answers to her question about the missing payments until the reporter got involved.
The car was flagged for repossession by the $4.6 billion credit union because her payments were short by 66 cents each month.
The credit union agreed to pay the $400 repossession fee and to have the nurse's car towed to her driveway.
A spokesperson for the credit union stated that before repossessing a vehicle, the credit union will attempt to contact the member by phone, mail and even door-knock service to make payment arrangements.
The nurse stated she was never contacted by the credit union.
Read more.
The nurse was told her car was repossessed due to missed payments. But she was not able to get answers to her question about the missing payments until the reporter got involved.
The car was flagged for repossession by the $4.6 billion credit union because her payments were short by 66 cents each month.
The credit union agreed to pay the $400 repossession fee and to have the nurse's car towed to her driveway.
A spokesperson for the credit union stated that before repossessing a vehicle, the credit union will attempt to contact the member by phone, mail and even door-knock service to make payment arrangements.
The nurse stated she was never contacted by the credit union.
Read more.
Sunday, April 19, 2020
132 CUs Borrowed from Fed's Discount Window in Q1 2018
During the first quarter of 2018, 132 credit unions borrowed from the Federal Reserve's Discount Window.
Credit unions accessed the Federal Reserve's Discount Window 183 times during the first quarter of 2018 and borrowed an aggregate $243.7 million.
The average amount borrowed was $1,331,754 during the first quarter of 2018. However, the median amount borrowed was $10,000.
The maximum amount borrowed during the quarter was $42 million by United Nations Federal Credit Union (Long Island City, NY).
While most credit unions only visited the Discount Window once during the quarter, two credit unions were active borrowers from the Federal Reserve. Aurora Credit Union (Milwaukee, WI) visited the Discount Window 19 times during the quarter, followed by True North Federal Credit Union (Juneau, AK), which borrowed 17 times from the Discount Window.
The vast majority of the credit unions borrowing from the Discount Window used the primary credit program, which is available for the healthiest institutions. Two credit unions borrowed from the secondary credit program.
The Federal Reserve is required by law to disclose with a two year delay information on borrowings from the Discount Window.
Credit unions accessed the Federal Reserve's Discount Window 183 times during the first quarter of 2018 and borrowed an aggregate $243.7 million.
The average amount borrowed was $1,331,754 during the first quarter of 2018. However, the median amount borrowed was $10,000.
The maximum amount borrowed during the quarter was $42 million by United Nations Federal Credit Union (Long Island City, NY).
While most credit unions only visited the Discount Window once during the quarter, two credit unions were active borrowers from the Federal Reserve. Aurora Credit Union (Milwaukee, WI) visited the Discount Window 19 times during the quarter, followed by True North Federal Credit Union (Juneau, AK), which borrowed 17 times from the Discount Window.
The vast majority of the credit unions borrowing from the Discount Window used the primary credit program, which is available for the healthiest institutions. Two credit unions borrowed from the secondary credit program.
The Federal Reserve is required by law to disclose with a two year delay information on borrowings from the Discount Window.
Saturday, April 11, 2020
Lawsuit Accuses BECU of Charging Excessive Overdraft Fees
A putative class action lawsuit was filed against Boeing Employees Credit Union (BECU) on August 1, 2019.
The complaint alleged the Washington credit union was engaged in a practice of charging excessive fees on debit and ACH transactions. Specifically, BECU (a) assessed Overdraft Fees (OD Fees) on transactions that do not actually overdraw checking accounts; and (b) charged two or more Non-Sufficient Funds Fees (NSF Fees) on a single transaction.
Plaintiffs claimed these practices were in breach of BECU’s contracts with its members and were unfair and deceptive practices in violation of the Washington Consumer Protection Act.
Read the complaint.
The complaint alleged the Washington credit union was engaged in a practice of charging excessive fees on debit and ACH transactions. Specifically, BECU (a) assessed Overdraft Fees (OD Fees) on transactions that do not actually overdraw checking accounts; and (b) charged two or more Non-Sufficient Funds Fees (NSF Fees) on a single transaction.
Plaintiffs claimed these practices were in breach of BECU’s contracts with its members and were unfair and deceptive practices in violation of the Washington Consumer Protection Act.
Read the complaint.
Friday, April 10, 2020
Commentary: CUs Should Temporarily Suspend Cross-Collateralization During Economic Downturn
Many credit unions have cross-collateralization clauses in their membership agreements and account opening documents.
This means a credit union member's debt and savings are connected. So if a credit union member defaults on a loan at a credit union, a credit union can seize funds in the member's checking or savings account to cover the loss.
WILX News 10 recently reported that a credit union member had funds taken from his account by the credit union and applied to his past due loan. Once News 10 contacted the credit union, the credit union stated it made a mistake and refunded the money to the account.
As the United States addresses the coronavirus, a large portion of our economy has been shut down.
In the last 3 weeks, almost 17 million people have filed claims for unemployment benefits. The unemployment rate for April is expected to exceed the peak reached during the financial crisis at 10 percent.
Loan defaults are only going to increase.
While the practice of cross-collateralization benefits credit unions, it harms financially struggling credit union members, especially those of modest means.
Given the economic dislocation due to the coronavirus, credit unions should temporarily suspend the practice of cross-collateralization, if they have not already done so.
If credit unions do not voluntarily suspend this practice, credit union regulators and the Consumer Financial Protection Bureau should require credit unions to temporarily suspend the implementation of these clauses.
This means a credit union member's debt and savings are connected. So if a credit union member defaults on a loan at a credit union, a credit union can seize funds in the member's checking or savings account to cover the loss.
WILX News 10 recently reported that a credit union member had funds taken from his account by the credit union and applied to his past due loan. Once News 10 contacted the credit union, the credit union stated it made a mistake and refunded the money to the account.
As the United States addresses the coronavirus, a large portion of our economy has been shut down.
In the last 3 weeks, almost 17 million people have filed claims for unemployment benefits. The unemployment rate for April is expected to exceed the peak reached during the financial crisis at 10 percent.
Loan defaults are only going to increase.
While the practice of cross-collateralization benefits credit unions, it harms financially struggling credit union members, especially those of modest means.
Given the economic dislocation due to the coronavirus, credit unions should temporarily suspend the practice of cross-collateralization, if they have not already done so.
If credit unions do not voluntarily suspend this practice, credit union regulators and the Consumer Financial Protection Bureau should require credit unions to temporarily suspend the implementation of these clauses.
Saturday, April 4, 2020
Apple FCU to Pay $2.7 Million to Settle Overdraft Class Action
Apple Federal Credit Union (Fairfax, VA) settled a class action lawsuit regarding its overdraft practices.
The credit union agreed to pay $2.7 million.
In addition, Apple FCU issued revised disclosures for consumer checking Account holders further clarifying Apple FCU’s policy with respect to the authorization/settlement procedures relating to debit transactions, including non-recurring debit card transactions, that policy’s potential impact on overdraft transactions and the manner and method by which Apple FCU assesses Overdraft Fees.
As part of the settlement agreement, Apple FCU maintained that there was nothing wrong with the transaction processing practices it used and that it complied, at all times, with applicable laws and regulations and the terms of the account agreements with its customers.
The judge approved the final settlement on December 6, 2019.
Read the settlement agreement.
Read the order approving the settlement.
The credit union agreed to pay $2.7 million.
In addition, Apple FCU issued revised disclosures for consumer checking Account holders further clarifying Apple FCU’s policy with respect to the authorization/settlement procedures relating to debit transactions, including non-recurring debit card transactions, that policy’s potential impact on overdraft transactions and the manner and method by which Apple FCU assesses Overdraft Fees.
As part of the settlement agreement, Apple FCU maintained that there was nothing wrong with the transaction processing practices it used and that it complied, at all times, with applicable laws and regulations and the terms of the account agreements with its customers.
The judge approved the final settlement on December 6, 2019.
Read the settlement agreement.
Read the order approving the settlement.
Wednesday, March 25, 2020
Coronavirus and Liquidity Planning
The Texas Credit Union Department in its March Newsletter is encouraging credit unions to review their liquidity outlook, asset liability management practices and Liquidity Contingency Funding Plan to ensure that they have adequate liquidity to meet member loan demand and share withdrawal requests.
The regulator wrote that "[a] number of your members will likely need lending assistance or will be making savings withdrawals to get thru these challenging times."
As part of the credit union's Contingent Funding Plan, each credit union should address:
The regulator wrote that "[a] number of your members will likely need lending assistance or will be making savings withdrawals to get thru these challenging times."
As part of the credit union's Contingent Funding Plan, each credit union should address:
- its policies to manage a range of stress environments, identification of some possible stress events, and identification of likely liquidity responses to such events;
- its lines of responsibility within the credit union to respond to liquidity events;
- its management processes that include clear implementation and escalation procedures for liquidity events;
- its outside sources of liquidity for contingency needs; and
- the frequency the credit union will test and update the plan.
Tuesday, February 25, 2020
Washington CU Regulator Expects CUs to Measure Consumer Complaints
The Washington Division of Credit Unions is expecting that credit union board of directors and senior management should receive periodic reports regarding consumer complaints.
The state regulator stated that these periodic reports should include the following:
The state regulator stated that these periodic reports should include the following:
- The volume and types of complaints received;
- The channels in which complaints are received (e.g. social media, email, in person);
- The reimbursements paid for potential violations of consumer protection laws; and
- Any identified trends.
Thursday, February 13, 2020
Retiring Illinois Bankers Exec Says Brazen CU Behavior Is Getting Noticed by Lawmakers
In an article appearing in BankBeat, Linda Koch, who will retire this summer as the president and CEO of the Illinois Bankers Association, had some interesting comments about credit unions and taxation.
Koch noted that the behavior of large credit unions has become more brazen with the acquisition of community banks and purchasing the naming rights to sports and entertainment venues.
She commented that these actions are getting the attention of lawmakers.
She believes that these actions by the credit union industry will ultimately force Congress and state legislatures to do the right thing and tax credit unions.
Read the article.
Koch noted that the behavior of large credit unions has become more brazen with the acquisition of community banks and purchasing the naming rights to sports and entertainment venues.
She commented that these actions are getting the attention of lawmakers.
She believes that these actions by the credit union industry will ultimately force Congress and state legislatures to do the right thing and tax credit unions.
Read the article.
Friday, January 3, 2020
257 CUs Borrowed from Federal Reserve Discount Window During Q4 2017
The Federal Reserve released data on December 31 that 257 credit unions visited the Discount Window 322 times and borrowed an aggregate $344,854,639 during the fourth quarter of 2017.
In the third quarter of 2017, 188 credit unions borrowed from the Federal Reserve's Discount Window.
The average amount borrowed by credit unions from the Discount Window was $1,074,314. However, the median amount borrowed was $10,000.
The maximum amount borrowed was $90 million by Great Lakes Credit Union (Bannockburn, IL).
United Business and Industry Federal Credit Union (Plainville, CT) visited the Discount Window 19 times during the the quarter, followed by Aurora Credit Union (Milwaukee, WI), which visited the Discount Window 15 times during the quarter.
The vast majority of the credit unions borrowing from the Discount Window used the primary credit program, which is available for the healthiest institutions. Five credit unions borrowed from the seasonal credit program, which assists small depository institutions in managing significant seasonal swings in their loans and deposits.
The Federal Reserve is required by law to disclose with a two year delay information on borrowings from the Discount Window.
In the third quarter of 2017, 188 credit unions borrowed from the Federal Reserve's Discount Window.
The average amount borrowed by credit unions from the Discount Window was $1,074,314. However, the median amount borrowed was $10,000.
The maximum amount borrowed was $90 million by Great Lakes Credit Union (Bannockburn, IL).
United Business and Industry Federal Credit Union (Plainville, CT) visited the Discount Window 19 times during the the quarter, followed by Aurora Credit Union (Milwaukee, WI), which visited the Discount Window 15 times during the quarter.
The vast majority of the credit unions borrowing from the Discount Window used the primary credit program, which is available for the healthiest institutions. Five credit unions borrowed from the seasonal credit program, which assists small depository institutions in managing significant seasonal swings in their loans and deposits.
The Federal Reserve is required by law to disclose with a two year delay information on borrowings from the Discount Window.
Monday, December 2, 2019
WSJ: CUs Have Outgrown Down-Home Reputation
An article in the Wall Street Journal says that credit unions have outgrown their down-home reputation.
The article notes that large credit unions "are using their newfound financial heft to compete aggressively for business."
The article points out that following the financial crisis, credit union regulators took a more hands-off approach compared to other federal banking regulators. The best example of this hands-off approach is the continued delay of the National Credit Union Administration's risk-based capital requirement for credit unions with at least $500 million in assets.
The article states that the National Credit Union Administration does not see large concentrations in high-risk activities at the nation's credit unions, but analysts are uneasy how these large credit unions might fare in a recession.
Read the article (subscription required).
The article notes that large credit unions "are using their newfound financial heft to compete aggressively for business."
The article points out that following the financial crisis, credit union regulators took a more hands-off approach compared to other federal banking regulators. The best example of this hands-off approach is the continued delay of the National Credit Union Administration's risk-based capital requirement for credit unions with at least $500 million in assets.
The article states that the National Credit Union Administration does not see large concentrations in high-risk activities at the nation's credit unions, but analysts are uneasy how these large credit unions might fare in a recession.
Read the article (subscription required).
Sunday, December 1, 2019
Moebs Study: Banks Paying Higher Deposit Rates Than CUs
A study by Moebs Services found that banks are paying higher deposit rates than credit unions.
The study found that for the first time since 2007 total interest expense divided by assets at credit unions is less than banks. So far this year, banks are 90 basis points (BPs), while CUs are 83 BPs or 7.8 percent less.
However, the study found that credit unions with greater than $10 billion in assets are paying 116 BPs, while similarly-sized banks are paying 91 BPs.
In contrast, community banks are paying 66 BPs compared to only 43 BPs by credit unions.
The study found that for the first time since 2007 total interest expense divided by assets at credit unions is less than banks. So far this year, banks are 90 basis points (BPs), while CUs are 83 BPs or 7.8 percent less.
However, the study found that credit unions with greater than $10 billion in assets are paying 116 BPs, while similarly-sized banks are paying 91 BPs.
In contrast, community banks are paying 66 BPs compared to only 43 BPs by credit unions.
Friday, November 22, 2019
GTE to Issue Almost $185 Million in Auto ABS
GTE Credit Union (Tampa, FL) is planning to issue $184.8 million in prime auto loan asset-backed securities, according to a presale report by S&P Global Ratings. This is the first auto loan securitization by GTE CU.
The deal is expected to close Nov. 26.
The credit quality of the underlying pool, which consists of prime automobile loans, had a weighted average non-zero FICO score of 727.
Robust levels of credit enhancement mitigate the collateral pool's extremely high geographic concentration in and around the Tampa region of approximately 98 percent.
The loan pool has a high concentration of loans with maturities greater than 72 months comprising over 62 percent of the aggregate pool. Approximately 31 percent of the pool is comprised of loans with original terms of 73-75 months, and another 31 percent has terms of 75-84 months.
The underlying pool of auto loans has a weighted average loan-to-value ratio of approximately 92.93%, and approximately nine months of weighted average seasoning.
Read more.
The deal is expected to close Nov. 26.
The credit quality of the underlying pool, which consists of prime automobile loans, had a weighted average non-zero FICO score of 727.
Robust levels of credit enhancement mitigate the collateral pool's extremely high geographic concentration in and around the Tampa region of approximately 98 percent.
The loan pool has a high concentration of loans with maturities greater than 72 months comprising over 62 percent of the aggregate pool. Approximately 31 percent of the pool is comprised of loans with original terms of 73-75 months, and another 31 percent has terms of 75-84 months.
The underlying pool of auto loans has a weighted average loan-to-value ratio of approximately 92.93%, and approximately nine months of weighted average seasoning.
Read more.
Tuesday, November 12, 2019
Auto Loans Are Getting Riskier
Some auto loan metrics indicate car loans are getting riskier.
The Wall Street Journal is reporting that more car loan borrowers are underwater.
According to Edmunds, 33 percent of people who traded in cars to buy new ones in the first nine months of 2019 had negative equity. In comparison, underwater borrowers were 28 percent five years ago and 19 percent a decade ago. The average amount owed by these underwater borrowers through the first 9-months of 2019 was about $5,000.
The amount owed on the trade-in is wrapped into the new auto loan.
To help make the loan payments more affordable, the length of auto loans is becoming longer. But that also means that a smaller share of the monthly payment is going to pay down the principal, which could leave the borrower further underwater when this vehicle is traded-in.
The Wall Street Journal is reporting that more car loan borrowers are underwater.
According to Edmunds, 33 percent of people who traded in cars to buy new ones in the first nine months of 2019 had negative equity. In comparison, underwater borrowers were 28 percent five years ago and 19 percent a decade ago. The average amount owed by these underwater borrowers through the first 9-months of 2019 was about $5,000.
The amount owed on the trade-in is wrapped into the new auto loan.
To help make the loan payments more affordable, the length of auto loans is becoming longer. But that also means that a smaller share of the monthly payment is going to pay down the principal, which could leave the borrower further underwater when this vehicle is traded-in.
Thursday, November 7, 2019
TransUnion: CUs Are Capturing A Greater Share of Auto Loans
A TransUnion blog is reporting that credit unions are capturing a growing share of the auto finance marketplace.
Between 2013 and 2018, credit unions’ market share of the auto loans rose 8 percent.
TransUnion cited several factors contributed to this market share gain.
TransUnion reported that credit unions took advantage of banks tightening their underwriting of auto loans between the third quarter of 2016 thru the fourth quarter of 2017. Credit unions gained market share across all credit tiers, except subprime.
In addition, credit unions were undercutting their competition with respect to interest rates on auto loans and extended the terms of these loans. TransUnion found that credit unions were capturing 55 percent of the share of auto loans with maturities between 76 and 84 months and 53 percent of the share of loans beyond 85 months in maturity. While extending the maturity of the auto loan makes car payments more affordable, consumers will pay more in interest over the life of the loan.
Credit unions have increased their share of used car financing to grow their auto finance market share.
TransUnion also observed that credit unions are dominating the auto refinance market.
Read the blog post.
Between 2013 and 2018, credit unions’ market share of the auto loans rose 8 percent.
TransUnion cited several factors contributed to this market share gain.
TransUnion reported that credit unions took advantage of banks tightening their underwriting of auto loans between the third quarter of 2016 thru the fourth quarter of 2017. Credit unions gained market share across all credit tiers, except subprime.
In addition, credit unions were undercutting their competition with respect to interest rates on auto loans and extended the terms of these loans. TransUnion found that credit unions were capturing 55 percent of the share of auto loans with maturities between 76 and 84 months and 53 percent of the share of loans beyond 85 months in maturity. While extending the maturity of the auto loan makes car payments more affordable, consumers will pay more in interest over the life of the loan.
Credit unions have increased their share of used car financing to grow their auto finance market share.
TransUnion also observed that credit unions are dominating the auto refinance market.
Read the blog post.
Wednesday, October 23, 2019
CU Overdraft Fees Up 3.4 Percent from a Year Earlier
Moebs Services is reporting that the median overdraft fee at credit unions rose 3.4 percent over the past year ending on June 2019.
The median overdraft fee at credit unions was $30 as of June 2019, up from $29 a year earlier.
In comparison, the median overdraft fee at banks increased by 6.7 percent over the past year to $32.
Unsurprisingly, the study found that there was a year-over-year decline in the volume of overdrafts at both credit unions and banks. The volume of overdrafts were down 1.2 percent at credit unions versus 6.8 percent at banks.
Michael Moebs, Economist and CEO of Moebs Services, contends that history shows that overdraft revenues will either stagnate or decline with the increase in overdraft fees.
The median overdraft fee at credit unions was $30 as of June 2019, up from $29 a year earlier.
In comparison, the median overdraft fee at banks increased by 6.7 percent over the past year to $32.
Unsurprisingly, the study found that there was a year-over-year decline in the volume of overdrafts at both credit unions and banks. The volume of overdrafts were down 1.2 percent at credit unions versus 6.8 percent at banks.
Michael Moebs, Economist and CEO of Moebs Services, contends that history shows that overdraft revenues will either stagnate or decline with the increase in overdraft fees.
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