As credit unions navigate the financial tapestry, understanding the dynamics between savings and loan growth becomes imperative for credit union growth in 2024. CUNA’s forecast group lays out a nuanced picture for the upcoming horizon, highlighting a sluggish pace in both savings and loan growth, yet with a variance in degree.

Here’s an in-depth look into the forecasted growth metrics and their potential implications:

The Savings Conundrum:

The forecast points towards a tepid savings growth, with credit union savings balances projected to remain nearly unchanged in 2023, inching up by a modest 3.0% in 2024. This sluggish growth rate could potentially impede the traditional funding model of credit unions.

Loan Growth Dynamics:

On the flip side, loan growth is expected to clock in at 7.0% in 2024, but with a significant taper down to 4.0% in 2024. The driving factors behind this slowdown are multifaceted, with first mortgage and automobile lending trailing behind. However, there’s a silver lining as variable-rate home equity lines and unsecured loans like personal loans and credit card balances are poised for stronger growth.

Navigating the Divergence:

The variance in growth rates between savings and loans presents a balancing act for credit unions. The challenge lies in managing the liquidity and ensuring a healthy loan-to-savings ratio, amidst the backdrop of varied loan growth across different categories.

Strategic Adjustments:

Credit unions may need to realign their strategies to thrive in this complex growth landscape. This could encompass diversifying loan offerings, bolstering member engagement to foster savings, and perhaps exploring alternative funding avenues to sustain loan growth.

The narrative spun by CUNA’s forecast group is both a mirror and a window for credit unions. It reflects the intricate balance sheet dynamics while opening a vista of strategic opportunities to ensure sustained growth and financial stability. As credit unions venture into this forecasted terrain, adapting to the evolving growth dynamics while staying true to their member-centric ethos will be pivotal in continuing to serve their communities robustly.