Record CU Deposits Playing Key Role in Growth & Inflation

Shopping on phone

While higher inflation is concerning local business leaders, workers and households, record-high deposits at California and Nevada credit unions continue playing a key role in the economic growth that’s driving those price increases according to first-quarter 2021 industry data released by the California and Nevada Credit Union Leagues (scroll down to view local/regional breakouts).

(Register for the 2021 “Your Economy—Your Credit Union” virtual conference happening on Tuesday, July 20th!)

Going into the second half of 2021, rising inflation is materializing in different ways, happening for various reasons, and can be absorbed by consumers — but only to an extent and for so long. Most economists hope today’s inflation upswing doesn’t turn into an unhealthy trend and stick around for the long term, where increasing worker wages and producer material prices are quickly and directly passed to consumers when they buy goods or services.

Deposits may be driven higher as credit union members consider saving more money to combat rising inflation expectations, according to Robert Eyler, independent economist, academic leader at Sonoma State University, and a long-time board member of Redwood CU (headquartered in Santa Rosa, CA).

“Many individuals who already received federal government stimulus payments have also been going back to work and are increasing their deposits — a trend likely to continue,” Eyler said. “However, most economists expect current inflation levels to moderate by the end of this year as the economic recovery continues and worldwide supply chains are less affected by the COVID-19 pandemic.”

Regional Snapshots: Members, Loans, Deposits
Meanwhile, credit unions and their local members — including households, workers, consumers and small business owners — are still navigating the transition out of a COVID-19 pandemic economy.

These factors are impacting their borrowing and savings habits across California as the economy continues growing, a mismatch in job demand versus supply-of-workers persists, and low interest rates provide a cushion for mortgages, home equity loans, new and used vehicle loans, credit cards, business loans, and other types of lending.

You can view local/regional California and Nevada credit union trends in membership, loans and deposits as of March 31, 2021 compared to the year-ago period (year-over-year/annualized):

CA and NV Peer CU Benchmark Trends
You can also access the most recent Quarterly Credit Union Performance Report (1Q 2021) as you continue to strategically plan for your credit union’s next steps.

This comprehensive report is created every quarter specifically for C-level executives, senior management, and board directors. It’s one way we are equipping League members with the data they need to accurately benchmark their credit union’s performance to others across the state.

Included is information and data on: California, Nevada, and U.S. trends; five-year breakdowns; industry demographic snapshots and growth rates; portfolio analysis; earnings, capital adequacy, and asset quality; and asset/liability management, productivity, and structure.

This report is just one of multiple endeavors we are always fine-tuning to help you navigate the future, including local industry trends on loans, deposits and membership, expertise on economic trends, movement in the financial markets, interest rate expectations, and regional economic forecasts and news.

Pin It