ARLINGTON, Va.—Total consumer credit “surged” in June, up 10.5%, at a seasonally adjusted, annualized rate and up 7.7% compared to a year ago, according to new federal data.
Curt Long
Revolving credit - primarily credit cards - rose 16.0% this month and is up 13.8% compared to June 2021. Non-revolving credit – primarily auto loans and education loans – rose 8.8% this month and is up 5.8% from a year ago.
“Consumer credit surged in June as balances advanced by the second-largest total in history,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Total outstanding consumer debt remains below its pre-COVID path, but the gap is quickly closing as the strain of high inflation is hastening the normalization of household balance sheets.”
Long noted a recent report from the Federal Reserve Bank of New York found that, “while household balance sheets overall appear to be in a strong position, we are seeing rising delinquencies among subprime and low-income borrowers.”
Total consumer credit for credit unions rose 1.8%, on a seasonally adjusted basis, in June, compared to a 1.7% gain for banks and 1.3% increase for financial companies. From a year prior, total consumer credit at credit unions rose 13.3%, while banks experienced a 12.4% gain and financial companies rose 1.3%.
CU Share Rises
Over the past 12 months, credit unions’ share of the market rose 0.7 percentage points to 12.7%. Banks’ share rose by 1.7 percentage points to 41.7%, and financial companies' share fell by 0.8 percentage points to 12.6%.
"NAFCU expects more robust growth in consumer credit as inflation remains uncomfortably high and auto supply begins to normalize," concluded Long.
As CUToday.info reported here, CUNA data show credit unions hit a new record for lending during June.
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