How are credit unions using excess liquidity?

Many Americans have been beefing up their savings during the COVID-19 lockdowns. Credit unions are putting those additional funds toward less fortunate members.

Share balances at U.S. credit unions have grown at near-record rates since the onset of COVID-19 and the resulting lockdowns. According to second quarter data from Callahan & Associates — representing 99.6% of industry assets — deposit balances at credit unions increased 16.5% year-over-year. This is the fastest annual rate since 2003. Meanwhile, total loan balances rose 6.6%. Together, these top-level dynamics have driven down the industry’s loan-to-share ratio to 76.2% — the lowest level since the first quarter of 2016.

LOAN-TO-SHARE RATIO

FOR U.S. CREDIT UNIONS | DATA AS OF 06.30.20

The industry’s loan-to-share ratio usually increases between March and June, but heavy share growth has prolonged what is usually a seasonal decline.

 

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