A new study by the credit company, TransUnion, shows that millennials are both a key driver and target market for sustained loan growth for credit unions.

TransUnion found that in the first quarter of 2016, 25% of credit union members were millennials compared with Q1 2013, where they made up only 20% of credit union membership.

Nidhi Verma, senior director of research and consulting for TransUnion has said, “Millennials are an important set of borrowers for credit union growth. 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.”

The research showed that credit union memberships via mortgage origination have went up at a decent pace in recent years. Participants reported that credit unions had 3.8 million mortgage members in the first quarter of 2016, a 4% increase from 3.67 million for the same time period last year. Credit union mortgage memberships have grown 13% over the last five years from 3.29 million in the first quarter of 2011.

“The data shows that credit union membership rates are growing much faster than the overall credit-active population,” said Verma. “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.”

Auto loans ranked high for loan growth with credit union executives. Credit unions reported auto memberships had grown 9.8% year-over-year from Q1 2015, to Q1 2016.

Credit cards ranked in the top three areas of opportunity for credit unions, but only 6% said that they were a top priority for 2016. The survey found that 69% of credit union executives said more than half of their members do not have a credit card with their credit union.

“Our data shows that 18 million credit union members do not have a credit union card in their wallet, which presents a sizable opportunity for growth,” said Verma. “Credit union executives have an opportunity to cross-sell products to these members who may have a mortgage, auto loan or other product with their credit union already. Most importantly, 75% of these members have a prime or better credit risk score, which means credit performance would most likely remain strong.”

Top Areas of Growth/Focus/Opportunity for Credit Union Executives in the Next 12 Months

Category % Ranked #1 in 2016 Survey
(2015 Percentages)
% Ranked Top 3 in 2016
Survey (2015 Percentages)
Auto Loans 41% (48%) 80% (81%)
Mortgage Loans 22% (26%) 61% (60%)
Share Draft Accounts 10% (3%) 26% (24%)
Credit Cards 6% (8%) 31% (46%)

Erik Sandstrom
LoanSafe's Mortgage Expert
I'm a Senior Loan Officer and LoanSafe mortgage expert. If you need a live rate quote, or need help getting a new mortgage, please call me direct anytime at 619-379-8999.