Improved economic and credit conditions, leading to higher interest rates in 2015 and 2016, will bolster credit union earnings, asset quality and capital, according to CUNA’s recently updated 2015-16 economic forecast.

“We do not see an interest-rate hike (by the Federal Open Market Committee) dampening growth,” said Perc Pineda, CUNA senior economist.

Credit union loan balances will climb 11% this year after a 10.4% jump last year, as households are expected to release pent-up demand for automobiles, furniture and appliances over the next two years, the forecast said.

New-auto loans, credit card loans and purchase-mortgage loans will see strong gains in growth as well.

After climbing by 4.5% in 2014, savings balances will rise 4% in 2015 and 4% in 2016, according to the new forecast. Further, memberships will expand at 3% in both 2015 and 2016.

The forecast also calls for delinquencies to drop to 0.75% in 2016, for net charge-offs to decline to an average of 0.45% from 0.49% by 2016, and for the return on assets to remain at 0.8% for 2015 and 2016.

Also, capital-to-asset ratios will climb to 11% by the end of 2015.

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