NCUA Q1 2024 Data: Slower Economic Forecast Sets Michigan Credit Union Expectations

Lansing, Mich. ?— Aug. 8, 2024 — According to the National Credit Union Administration’s Q1 2024 data, the pace of quarterly economic growth was at its lowest level in two years — mostly due to growth in imports. Surging demand also was reflected in faster inflation with year-over-year changes in the Consumer Price Index jumping from 3.3% in 2023 to 3.5% in the year ending March 2024.

Against this backdrop, first quarter credit union operating results slowed down, although savings growth was strong (mostly reflecting both seasonal trends). In contrast, loan balances plateaued during the three-month period, impacting membership growth.

Although there’s optimism for a “soft landing” for the economy (with odds of a recession standing at 33%), economists expect cooling economic growth in full-year 2024 and continuing into 2025. Included in this forecast is a lower demand for indirect auto loans, which may continue to slow credit union memberships. However, credit unions should expect new members to grow at roughly three times higher than U.S. population growth.

During the first quarter in Michigan, memberships grew by 0.7% — well above the previous quarter’s -0.3% dip and relatively on pace with the Q1 national rate of 1%. Total Michigan credit union memberships now stand just above 6 million.

Membership growth by region (for trailing 12 months): 

• Alpena: 2.8%
• Detroit: 2.4%
• Flint: -0.5%
• Lansing: -7.0%
• Grand Rapids: 3.1%
• Marquette: 2.8%
• Muskegon: 0.6%
• Traverse City: 3.3% 

Credit union loan portfolios saw a 6.1% increase in Q1, which is above the national rate of 4.8%. 

Q1 loan growth by type (for trailing 12 months):

• Credit cards: 9.9%
• HEL & 2nd Mtg: 18.0%
• Member business loans: 19.4%
• New auto: -5.5%
• Other unsecured loans: 12.8%
• Used auto: -0.1%

Loan growth by region (for trailing 12 months):

• Alpena: 2.7%
• Detroit: -6.5%
• Grand Rapids: 9.6%
• Lansing: -1.4%
• Marquette: 12.9%
• Muskegon: 5.2%
• Traverse City: 3.5%

 

America’s Credit Unions’ Q1 Member Benefits Report for 2024 shows that Michigan credit unions contributed a total of $994.5 million in direct financial benefits to Michigan’s 6 million members over the previous twelve months.

These benefits translate to $166 per member or $349 per household. These figures are calculated based on average savings differences between credit union and bank pricing. They result from financial benefits, such as higher CD rates and fee-free checking, as well as lower rates and fees on products like home and auto loans.

That means, according to America’s Credit Unions, credit union members financing a $25,000 vehicle for five years will save an average of $70 per year in interest when compared to banking institutions.

 

“The NCUA’s latest quarterly data sets the credit union movement’s expectations for a slower year for earnings and membership growth. However, these levels are expected to return to normal levels before too long, and in the meantime, Michigan credit unions remain very healthy,” said Michigan Credit Union League (MCUL) CEO Patty Corkery. “This tells me that the Michigan credit union movement needs to use this economic moment as a catalyst for our industry. Whether through our Try a Credit Union awareness campaign, which targets Gen Z consumers, member research collaborations with Filene, year-round advocacy efforts or the Michigan Credit Union Foundation’s student-based Financial Reality Fair assistance, MCUL will continue to clearly define, for potential new members, what the credit union difference means.”

Find the complete Q1 2024 NCUA Call Report Data here.

You can also find more Q1 data on Michigan credit unions’ low rates and high dividends in America’s Credit Unions’ Q1 Member Benefits Report.

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