The National Association of Federally Insured Credit Union’s (NAFCU) Credit Union Sentiment Index (CUSI) showed slight improvement overall in July.
The consumer sentiment index registered a score of 60.4, up from 58.3 in June. Three of the four component scores improved, with lending making the biggest leap as respondents noted a more positive outlook for both loan demand and applicant quality. Most respondents see their regulatory burden as higher than a year ago, and the outlook for the next 12 months declined somewhat from June.
The CUSI is based on NAFCU member responses to questions on growth and earnings outlook, lending conditions and regulatory burden. The index can range from 0 to 100; a score of more than 50 indicates a generally positive or optimistic outlook.
NAFCU data also showed that credit unions’ commercial loans make up about 10 percent of annual loan originations, up sharply from 1.9 percent 10 years ago.
Credit union respondents noted that their business loans tend to be small, with the vast majority in 2016 being at or below $250,000. Sixty-five percent of credit union respondents’ MBL originations were below $100,000 – compared with only 6 percent of banks’ business loans as of March.
NAFCU continues to reiterate to regulators and lawmakers that the statutory cap on the aggregate amount of MBLs that credit unions can make is a hindrance to those institutions that want to do more to help their small-business members.