San Diego households save more after pandemic
Amid the pandemic, households in San Diego have deposited and reserved more money in credit unions, according to a report released Thursday by the California Credit Union League.
The league, which is the trade association for statewide credit unions, said deposits made by about 1.2 million San Diego consumers have reached a record total of $ 20.7 billion, or an increase of 30%, between June 2019 and June 2021.
Robert Eyler, contract economist for the California Credit Union League, said the increase, which is among the highest in recent years, is likely due to travel restrictions put in place during the coronavirus pandemic.
What’s more, many workers have concerns about job stability and are unsure of where the economy is heading, Eyler said, which could be contributing to the growing trend towards savings.
The report says chequing account drafts hit a record $ 4.7 billion, an increase of 16%, and common stocks in savings accounts totaled $ 4.8 billion, an increase by 35%. Money market accounts hit a record $ 7 billion, up 17% in two years.
Recent inflation in the prices of goods and services could erode some of these households’ savings, Eyler added.
“If inflation remains relatively high until 2022 and interest rates on deposits start to react to this increase, household savings could flow into higher interest rate accounts,” he said. he declared.
While San Diegans deposited more into credit unions, they took less loans, according to the report. Total San Diego credit union loans fell over the two-year period to $ 12.3 billion, down 14% from the $ 14.3 billion in loans in 2020.
Senior mortgages down 10%, home equity loans and lines of credit down 26%, credit card loans 12% and used car loans 17%, according to the report .
The only major category of loans that increased during the pandemic was business loans, up 11%. This included homeowners’ home loans.
Credit unions are non-profit organizations governed by their members, some of whom volunteer to serve on the boards of directors of credit unions. Profits made by credit unions flow back to members in the form of lower loan fees and rates and higher savings rates, according to industry groups.