Paying ATTENTION...®
to people and their money

Michelle Stricklin, President/CEO
Northwest Georgia Credit Union

Georgians Buy More Cars as Confidence Builds, New Report Shows
Savings at state’s credit unions rise year to date
even as first mortgage loans surge

Highlights
  • New car loans rose 8.8 percent during the first nine months of the year
  • Total savings at the state’s credit unions are up 2.9 percent over the past year
  • First mortgage balances grew by 4.4 percent for the first nine months of the year

ATLANTA (December 2, 2013) – Increased lending among Georgia’s credit unions is a sign the state’s economy continues to improve and consumer confidence is on the rise, a new report signals.

Total loans at the state’s 139 credit unions increased 4.7 percent during the first nine months of the year and 6.4 percent during the past 12 months, according to new data released by Georgia Credit Union Affiliates (GCUA). Loans for new and used cars were the biggest driver of the increase.

While automobile lending remained the top performing category in the loan portfolio with growth rates of 8.8 percent and 6.9 percent (new and used vehicle, respectively) during the first nine months of 2013, first mortgage loan growth also kept pace with overall loan growth. First mortgage balances increased 4.4 percent for the first nine months and 6.5 percent over the past year.

"People are taking advantage of an improving economy and the benefits of credit union membership," explained Mike Mercer, president and CEO of Georgia Credit Union Affiliates. "With growing consumer confidence and continued low interest rates, people are beginning to make the big life purchases that were put on hold during the recession."

Home prices in Georgia increased 2 percent in the second quarter of 2013 and 11 percent over the past 12 months as of June 2013, according to the Federal Housing Finance Agency (FHFA). That growth ranked seventh in the nation as of June 2013, the most recent data available.

Debt and income slideAlso noteworthy, Georgians continue to squirrel away their hard-earned money as balances in regular savings accounts increased 9 percent over the past 12 months while the total savings balances grew by 2.9 percent during the same timeframe. Credit card balances increased 2.1 percent over the past 12 months, but have declined 1.7 percent so far this year.

Based on trends of years past, credit card balances increase during the final quarter of the year because of holiday spending. It remains to be seen how much Georgia consumers spend this season: 38.9 percent of consumers told GCUA earlier this year they plan to spend less this year compared to last year (52.7 percent said they plan to spend the same amount).

Continuing a trend of recent years, membership at the state’s credit unions increased 2.7 percent during the past year in part because of better rates compared to banks in the state.

For example, the average rate of a four-year new automobile loan at a Georgia credit union is currently 1.24 percentage points lower than a comparable rate at a banking institution. That means on a $20,000 used car loan, the consumer would save about $265 over the life of the loan.

Georgia Consumer Loan Interest Rate Averages
November 6th 2013 – Source: Informa Research Services
Product Credit Unions Banks CU Difference
Unsecured personal $5,000/two years 9.92% 10.03% -0.11%
Credit Card Standard 11.39% 15.75% -4.36%
Credit Card Platinum 9.29% 10.99% -1.70%
New Vehicle – Five-year loan 2.84% 3.59% -0.75%
Used Vehicle – Four-year loan 3.07% 4.31% -1.24%

"Consumer balance sheets have improved substantially since the heady days before the recession, but families are still holding debt levels way above historical norms. Growth in spending will continue to be moderate until household debt levels come in line with income," Mercer said.

For the quarterly report, GCUA compiled savings and lending data from September 2012 to September 2013 at 44 credit unions from across the state, representing 94 percent of credit union assets and 88 percent of members in Georgia.

Click here to view previous "Paying Attention...®" reports. More information about Georgia credit unions is available at www.georgiacreditunions.org or on facebook.com/creditYOUnion.

About Georgia Credit Union Affiliates
Georgia Credit Union Affiliates (GCUA) provides services and support that help credit unions meet the financial services needs of the state’s more than 1.9 million credit union members. GCUA offers advocacy, educational, operational and marketing support for Georgia’s 139 credit unions, with combined total assets of more than $18 billion. More information can be found at www.georgiacreditunions.org.

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Trends at Georgia Credit Unions
Consumer Credit
 
Consumer Savings $ Balances
Growth Rates
Growth Rates
 
YTD
12 Months
   
YTD
12 Months
Credit Card -1.66% 2.10%   Regular Savings 7.64% 9.00%
Other Unsecured 2.78% 6.36% Money Market Accounts 4.67% 5.77%
New Vehicle 8.82% 11.62% Certificates of Deposit -6.66% -9.37%
Used Vehicle 6.87% 8.76% IRA/Keogh Accts -0.68% -1.18%
1st Mortgage 4.39% 6.51%
Transaction Accounts $ Balances
2nd Mortgage 2.38% 0.61% Checking Accounts 6.67% 6.67%
Business -2.95% -1.09%      
Total Loans 4.68% 6.36%   Total Savings 3.05% 2.93%
Number of Bankruptcy Filings:        
YTD No. of Filings   3,370   Memberships 2.12% 2.71%
% Change from Year Ago   -15.07%        
* First 9 months of 2013 compared to first 9 months of 2012   YTD: 1/1/13 - 9/30/13
12 Mos: 9/12 - 9/13
Georgia Credit Union Affiliates
Loans Savings