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Banks aren't lending to consumers; here's who is

Though bank lending to consumers has slowed to a near stop in recent months, there is one place people can go to get a cash infusion.

Credit unions have seen a surge in lending, pushing the 2014 total to the highest level since 2005 as the industry recovers from the financial crisis slowdown, according to SNL Financial.

Loans and leases totaled $720.78 billion for the year, making a 10.4 percent leap from 2013. That compares favorably to previous years, when the total increased 7.9 percent in 2013 and just 4.5 percent in 2012. SNL reported that the last time the industry saw double-digit gains was in 2005, ahead of a crisis that saw a breakdown in the subprime market reverberate through the entire industry and send the U.S. economy into the Great Recession.

Mortgages helped push the credit union gains, rising 9.1 percent for the year, while new-vehicle loans accelerated 21 percent to $87 billion and used-car loans rose 12.8 percent.

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Analysts have been predicting a rise in nonbank lending as the industry faces pressure from increasing regulation and a low interest rate environment that is compressing margins. Credit unions are owned by members, generally through businesses or trades, and provide multiple services similar to banks but do not fall under Federal Reserve regulation.

Net income also hit record levels at the nonprofit institutions, which earned $8.87 billion for the year, an 8 percent increase and the highest level since SNL began collecting credit union data going back to 1995.

Bank lending in 2014

Category
Gain or decline
C&I 12.50%
Real estate 2.40%
Residential real estate -0.70%
Home equity -4.10%
Consumer loans 5.20%
SNL Financial

In the aggregate, bank lending actually hit a record high for the year at $8.31 trillion. However, the bulk of the gains came through a surge in commercial and industrial loans (up 12.5 percent) and in money the banks loan the federal government through Treasury purchases, which increased 11.9 percent for the year and 30.9 percent in December alone, according to the Fed.

By comparison, consumer loans increased just 5.2 percent for the year, with a sharp tail at the end. The category rose only 1.5 percent in December and was up just 0.2 percent in January 2015. Residential real estate loans dropped 0.7 percent for the year and revolving home equity loans fell 4.1 percent.

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To be sure, those figures mark at least less of a decline than seen in previous periods. However, fourth-quarter earnings showed an industry relying more and more on C&I loans for business and less on the consumer.

"The consumer has been the missing piece to the loan growth story since the recession," analyst Gerard Cassidy at RBC Capital Markets told SNL.