Credit Unions continued to grow during the first quarter of 2014, although higher interest rates slowed mortgage originations, according [1] to the National Credit Union Administration [2] (NCUA). The group found that total first mortgage real estate loans reached $272.6 billion, up 9.7 percent from Q1 2013.
More than 61 percent of first mortgage loans in the latest report had fixed rates.
"The continued growth in credit union lending and gains in membership during the first quarter are positive signs," NCUA Board Chairman Debbie Matz said. "Investing in people and communities will produce dividends for credit unions in many respects, but the higher interest rate environment of late 2013 and the first quarter of 2014 slowed mortgage originations."
Matz continued, "To protect the Share Insurance Fund, NCUA continues to closely monitor the risks posed by rising interest rates, long-term investments and fixed-rate mortgages."
The group reported that the pace of mortgage originations slowed in the first quarter, down to $42.6 billion in Q1 2014 from $102.9 billion in the first quarter of 2013. NCUA attributes the decline to a reduction in mortgage refinancing, and "is consistent with the slowdown in the housing market during the quarter."
Overall, membership in federally insured credit unions grew by roughly 831,000 in the first quarter of 2014, reaching a new high of 97.1 million. However, consolidation of credit unions continues to increase.
"The number of federally insured credit unions fell to 6,491 at the end of the first quarter, 262 fewer than at the end of the first quarter of 2013, a decline of 3.9 percent. The decline is consistent with the trend of the last 40 years as the consolidation of federally insured credit unions continues," NCUA said.
Larger credit unions continued to lead in performance measures, with 445 credit unions holding a combined $751 billion in combined assets or 68 percent of the system's total assets for the quarter. Credit unions with less than $100 million recorded higher net worth but lagged in net worth growth, loan growth, membership gains, and return on average assets.