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April 9, 2013 - Credit unions continued to grow their share of the consumer credit market in February as banks and finance companies logged new declines, NAFCU Staff Economist Curt Long said Monday.

Data released by the Federal Reserve showed credit unions with a 0.2 percent increase in total consumer installment credit in February, with market share rising to 8.89 percent. By contrast, banks' share dropped 23 basis points to 43.12 percent, and finance companies' share declined 4 basis points to 24.33 percent.

Long said non-revolving credit continued to drive growth in February: Consumers took advantage of low interest rates to purchase new vehicles, and young adults continued to pursue higher education in a still-weak labor market. "Even though credit unions have a small stake in the student loan market, they are still gaining market share compared with banks and finance companies," Long noted.

Credit unions have gained 8.7 percent in the non-revolving segment since 2010, he said, while banks have gained 5 percent and balances at finance companies have fallen by 2.8 percent. Revolving credit at credit unions has increased 8.5 percent since 2010. In the same period, banks and finance companies have seen their share of revolving credit decline 2.9 percent and 17.5 percent, respectively.

Non-revolving credit, which is primarily made up of motor vehicle and education loans, increased at an annual rate of 10.9 percent, while revolving credit, which is primarily credit cards, increased 0.8 percent in February.

Total consumer installment credit was up this February by a seasonally adjusted, annualized 7.8 percent in February; that followed 5.5 percent growth in January and 6.3 percent growth in December.

For more details, see NAFCU's Macro Data flash report (login required).