Millennials Central to Credit Union Growth, TransUnion Research Finds

LAS VEGAS, NV--(Marketwired - August 02, 2016) - New TransUnion (NYSE: TRU) research has found that credit unions continue to grow at a faster rate than other financial institutions, and millennials are both a key driver and target market for sustained loan growth.

TransUnion found that in the first quarter of 2016, credit union membership grew at more than three times the rate of credit activity among consumers across other lender types, such as regional banks or finance companies. Credit unions experienced a year-over-year growth rate of 6.35% at the beginning of 2016, while industry credit active consumers grew at 1.86% in Q1 2016.

According to TransUnion data, 25% of credit union members in Q1 2016 were millennials. In Q1 2013, millennials made up only 20% of credit union membership. Millennial growth for non-credit unions grew at a slower pace, up to 25% in Q1 2016 from 23% in the first quarter of 2013. This is indicative of credit unions' strategic focus on millennial growth.

"Millennials are an important set of borrowers for credit union growth," said Nidhi Verma, senior director of research and consulting for TransUnion. "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 findings were coupled with a survey of 96 credit union executives, which gathered insights on key industry issues. The information was released today at TransUnion's annual credit union seminar in Las Vegas, which includes participants from leading credit unions across the country.

The survey found that 42% of credit union executives reported an overall year-over-year member growth rate higher than 5%. In particular, credit union memberships via mortgage origination have increased in recent years. In Q1 2016, credit unions had 3.8 million mortgage members, an increase of 4% from 3.67 million in Q1 2015. Compared to five years ago, credit union mortgage memberships have grown 13% from 3.29 million in the first quarter of 2011.

"The data show 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."