Mild recession expected in 2020.

An economist for credit unions said Thursday that credit unions should keep a close watch on their lending standards as the U.S. economy heads for a mild recession in 2020.

Steven Rick, economist for the CUNA Mutual Group in Madison, Wis., said consumers have been borrowing more than they make to satisfy pent-up demand, but they will be forced to start saving more and pay down their debts.

Recessions almost always start when growth in savings exceeds growth in loan portfolios, and end when the relationship reverses, he said. Those rates for credit unions coincided with the start of mild, short-lived recessions in 1991 and 2001 and the Great Recession that began in 2007. However, a dip in 1998 was not accompanied by recession.

Since 2013, credit union loan portfolios have been increasing at a rate faster than savings growth. CUNA’s Economic Update released this month shows a 9% rise in loans and a 7% rise in savings this year. Next year it forecasts that they will both grow 8%.

By 2020, Rick expects loan growth will dip below savings growth.