According to TransUnion’s new Credit Union Market Perspectives Report, loan balances of customers of credit union marketing increased in the second quarter of 2023. The only lender category with consistent balance growth was credit unions. Except for personal loans, new credit growth slowed across all categories, according to the report.
Customers of Credit Union Marketing Increased In The Second Quarter Of 2023(Photo: Business Insider)
Credit Union Marketing: The Necessity For Consumers To Apply For New Loans Is Decreasing
“Over the past two years, a lot of loans originated from the credit card side and the home equity [line of credit] side,” said Sean Flynn, senior community director of financial institutions at TransUnion. “The necessity for consumers to apply for new loans is decreasing, in my opinion, since more individuals are beginning to utilize their existing loans. The rate environment, in my opinion, is also a factor.” Flynn added.
Mortgage origination growth, which was down 58.5% overall, is obviously being affected by the rate environment. 23% of the originations are handled by credit unions, and 29% are held by “other banks,” which are banks that have not been identified as “regional” or “national.”
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Credit Union Marketing: Rise Of Loan Balances
Flynn made it clear that he is not an economist, but he pointed out certain positive trends in the rise of loan balances.
He said that the TransUnion study showed that, for the most part, delinquencies remained steady in the second quarter, citing surveys, such as one from the U.S. Census Bureau that revealed Americans were using credit cards and revolving lines of credit to make ends meet.
However, solid employment data and a low delinquency rate don’t always indicate that this usage of debt is an issue. According to Flynn, “People are still getting paid. People still have the money to pay off those debts even though they used some of their credit lines to pay for things or to take summer vacations.”
Delinquencies are shifting into a seasonal pattern that is more consistent with what was common before the pandemic, according to Flynn.
However, he noted that personal and auto loan delinquencies are still very high. This can mean that credit is becoming more restricted in these areas.
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