Credit unions are growing, and Millennials are both a key driver and a target market for sustained loan growth, according to a study by TransUnion.
In fact, about 25% of credit union members in the first quarter of 2016 were Millennials. This is up from the first quarter of 2013, when only 20% of the members were Millennials.
Credit unions actually grew by 6.35% annually, compared to the number of industry credit-active consumers, which grew 1.86% annually.
“Millennials are an important set of borrowers for credit union growth,” said Nidhi Verma, TransUnion’s senior director of research and consulting. “Credit unions are actively building their millennial membership, and in fact have experienced growth in this segment every quarter since 2010.”
“Millennials are likely candidates for new mortgages and other credit products as they age, offering credit unions a way to further their market share,” Verma said.
Along with the study, TransUnion also conducted a survey of 96 credit union executives. This survey showed that 42% of credit unions grew members at an annual rate of at least 5%.
Specifically, mortgage originations increased since last year. During the first quarter, credit unions had 3.8 million mortgage memberships, an increase of 4% from the first quarter last year. Credit union mortgage memberships grew 13% in the last five years.
“The data show that credit union membership rates are growing much faster than the overall credit-active population,” Verma said. “Credit union executives are strategically focused on gaining membership growth through mortgage originations, as well as offering products such as credit cards to their existing member base.”
In the survey, many ranked mortgages as a top area for growth or opportunity. At 22%, only auto loans came in higher at 41%.
Click to Enlarge