Credit unions are positive about its prognosis, especially with auto loans driving growth for them.
The chief economist of National Credit Union Administration, John Worth, said in a video that he expects auto loans, among all categories of loans offered by credit unions, to “lead growth”, The Wichita Eagle reports.
Auto loans grew by 10.7 percent in the second quarter of this year. Worth said the growth is “twice as fast” than other loan categories.
However, he also pointed out that the decline in mortgage refinancing could be a problem for some credit unions. Mortgage refinancing has plummeted by over 60 percent since May when rates started to increase.
Worth told the Kansas-based local news source that this plunge can take its toll on credit union refinancings.
But some credit unions disagreed, believing that the decline in mortgage refinancing is not going to be a problem to them.
Bob Thurman, president of Credit Union of America, told The Wichita Eagle that there was “a natural slowing already taking place” even before rates for long-term loans began rising.
TECU Credit Union CEO Chuck Bullock said that a lot of homeowners refinanced their mortgages over a year ago. And even if mortgage refinancing has been declining, more people are taking out mortgages to buy their houses.
But Thurman and Bullock agreed that auto loans are also leading in their credit unions.
Thurman said that auto lending has been “very brisk this year”, while Bullock thinks that it is growing because consumers “have waited longer than they normally would to replace their automobiles” and are slightly more confident about the economy.