Credit unions see rising delinquency rate at end of third quarter, but continue loan, savings, assets growth

Delinquency rates are up at credit unions as of the end of the third quarter, their federal regulator said late Thursday – while, at the same time, assets, savings and loans all increased, the agency said.

In reporting on credit unions’ performance at the end of the third quarter of 2023, the National Credit Union Administration (NCUA) said for the third quarter of 2023 the delinquency rate was 72 basis points (bp), up 19 bp from one year earlier. The agency noted that credit card and auto loan delinquencies are elevated at 190 and 78 basis points, respectively.

NCUA Board Chairman Todd Harper said that the rising delinquency rate is a sign of “financial strain on credit union balance sheets and household budgets, along with growing consumer financial stress.”

He said the agency is monitoring credit union performance closely. He said he also urges credit unions to “remain diligent in managing the potential risks on their balance sheets and when monitoring economic conditions and the interest rate environment.”

“Credit unions should also work with their members who are experiencing financial stress as early intervention can prevent a delinquency from becoming a charge-off,” he added. “Clearly, today’s economic environment requires active — not passive — management by all.”

However, the agency did note that credit unions continue to grow. Total loans outstanding increased $132 billion, or 9.1%, over the year ending in the third quarter of 2023, to $1.59 trillion. Total assets rose by $79 billion, or 3.7%, to $2.23 trillion, while federally insured shares and deposits increased $23 billion, or 1.4%, to $1.72 trillion.

The agency also noted that at the end of the third quarter, there were 4,645 federally insured credit unions with 138.8 million members.

Lending, Assets, Insured Shares, and Delinquencies Rise in Third Quarter