The $2.1 billion Municipal Credit Union in New York did not see strong growth inauto loans over the holidays, but there are signs that more robustsales are on the horizon, according to Ahmed Campbell, vicepresident of credit operations.

“We have a general pattern which sees our auto loan pace really drop off after Columbus Day weekend inmid-October,” Campbell said. “And, that happened last year too.But, where in other years, the pace would have been really slowuntil about mid-February, this year's is not as slow.”

As of Jan. 23, Municipal's auto loan portfolio totaled $308.6million with used car loan balances surpassing new car loans at$180 million and $128.6 million, respectively, according toCampbell.

The credit union did not change its underwriting criteria forthe lending wave and felt comfortable the credit union would notsee a greater percentage of the new loans go bad, he said.

“The loan fundamentals remain sound,” he said. “They are securedby an asset that people need, everyone uses their car, and there isjust a lot of pent up demand.”

However, Campbell stressed that Municipal is not sanguine aboutits risks in the loans. The credit union takes a sophisticatedapproach to monitoring loan performance and stepping in, ifnecessary.

“We will work with our members to help them make their paymentsand keep them in their cars,” Campbell said, adding determiningwhich approach to use depends on the member's prior payment historyand behavior.

“Frankly, we act quickly in some circumstances because theremight be people whose records suggest we would just be postponingthe inevitable if we gave them another 30, 60 or 90 days,” Campbellsaid. “But there are other people whose prior behavior makes itclear that any delinquency is unusual and that they might needhelp.”

Campbell also reported that 80% of members whose cars Municipalrepossesses actually get their cars back after working out a planwith the credit union to bring their loans current.

Consumer data firm TransUnion estimated the 60-day auto loan delinquency would hit 1.20% by the end of 2014 andrise to 1.27% by the end of 2015. This is still sharply below thelast high point of 1.59% in 2008.

“We expect the auto loan market to continue to performexceptionally well in 2015, with more sales leading to continuedincreases in auto loan debt per borrower as the national portfoliogets younger on average,” Peter Turek, automotive vice president inTransUnion's financial services business unit, said in a pressrelease.

Turek said TransUnion anticipates the economy will continue toimprove this year, with a better employment picture helping theauto industry.

“While the auto loan delinquency rate has slowly risen to apoint where it will be above 2010 levels, we are still far off thepeaks observed in 2008 and 2009 when delinquencies were more than30 basis points higher,” he said.

So far, the $720 million Point Breeze Credit Union in Hunt Valley, Md., has seen muchstronger auto loan performance, according to Tricia Harrison, chieflending officer. The cooperative is up 16% in auto loans driven bypent up demand and better weather.

“Last year was so awful in January and really into March,” sherecalled. “I think this year, people have been more able to get tothe dealerships and take a look at what they have.

Harrison said because New Year activity came on the heels of astronger than usual holiday season, she tended to see it as acontinuation of an existing trend.

Like Campbell, Harrison said Point Breeze did not change itsunderwriting criteria, but maintained a close watch on the loan'sperformance to limit any potential losses.

On the West Coast, the $810 million, 54,000-member LosAngeles Federal Credit Union is also basking in the glow ofhealthy auto loan portfolio growth, said Art Sookazian, vicepresident of special services, which includes collections.

As of Jan. 29, the cooperative's total auto loan portfolio was$71 million. Used car loan balances were $49.9 million and new carloan balances were $21.2 million, according to Sookazian.

As the case with other credit unions, member demand, as well asstrong incentives from auto manufacturers, has boosted loannumbers.

“They're making it easier to purchase an auto,” Sookazian saidreferring to the manufacturers.

In addition, the drop in gas prices has resulted in more peoplefeeling comfortable with affording car payments, he added.

Sookazian said Los Angeles FCU has implemented a sophisticatedsystem that measures and tracks delinquencies daily to help thecredit union keep on top of loan performance.

“The sales momentum seen throughout 2014 is continuing into 2015and, unlike last year, inclement weather has not slowed vehiclesales thus far,” John Humphrey, SVP of the global automotivepractice at J.D. Power, said in January. “With an additionalweekend in January this year, the industry is on a trajectory topost the second-largest year-over-year retail sales growth in thepast 17 months.”

With the continuation of low gas prices, consumers arepurchasing more trucks, Humphrey noted. In January, trucks, vansand SUVs accounted for 55.4% of sales, the highest level for aJanuary since 2004.