June 15, 2009


  • So what does this information tell us. Are we not serving our membership well enough in the lower credit tiers or are we just better at it than other FIs?
  • To answer your question, it depends on the credit union, their primary membership base and their region. Credit unions with low current delinquency may have a specific field of membership that is financially stable, or the credit union may have tighter lending standards. However, we know that credit unions continue to lend to members with near-record loan originations in 2008 and the highest first quarter volume ever in 2009. As an example, YTD First Mortgage Originations are up 39.5% versus March 2008. If you have questions about your own credit union’s lending standards consider these questions: How have underwriting guidelines changed over the past year? Are originations year to date on par or higher than the previous year? Do loan/product penetration and average loan balances indicate you are serving a similar portion of your membership as your peer credit unions?
    Lydia Cole, Callahan & Associates
  • Another possibility is that credit unions are more willing to work with members when they get in financial trouble. Anecdotally, the credit unions i've worked with are more proactive with their loan modifications and realistic about what can and cannot be done to help members. Financial education is a big influence as well.
    Alix Patterson