Lending Highlights from 2006

The lending transformations occurring in both the external market as well as across individual institutions are dramatic.


The transformations occurring in both the external market as well as across individual institutions are dramatic.  The results through the third quarter show credit unions continuing to do what they do best – growing their balance sheet by responding to member borrowing needs and providing competitive rates to savers.  Even in areas such as mortgage lending, a market in which larger lenders have announced significant layoffs, credit unions continue to post solid results.  The focus on continuing to do what is best for members is reflected in the steady performance that positions credit unions for long term success.

Credit unions are focusing on lending programs that meet the needs of their member base. Examples include:

  • San Antonio Federal Credit Union ($2.0B, San Antonio, TX) is addressing the need for more affordable housing by developing a focus on manufactured housing through its CU Factory Built Lending subsidiary.  
  • Many credit unions are providing alternatives to payday loans, such as State Employees Credit Union’s ($13.6B, Raleigh, NC) “Salary Advance Loan” which ties a savings program to a no-fee, 12 percent APR loan.  Programs such as these help to sustain credit union lending momentum while serving markets often overlooked by traditional lenders.
  • Sustaining a leading market position in auto lending is supported by the education programs many credit unions provide to members who are car shopping.  University Federal Credit Union’s ($730M, Austin, TX) “Wheels 101” program combines online tips with in-person seminars, helping members to better understand the car business and be smarter car buyers.
  • Credit unions’ ability to build partnerships with real estate agents through programs such as the CU Realty model being used in at least eight states, and even mortgage brokers as North Island Credit Union ($1.5B, San Diego, CA) has established, will be key to being involved early in members’ mortgage decision process.
  • Eastern Financial Florida Credit Union ($2.2B, Miramar, FL) has attracted over $17 million in card balances since relaunching their card program in late 2005 following the sale of their portfolio in 2000, an indication of the value credit unions can provide in a market dominated by large players.

These are just some examples of credit unions that are recapturing the growth momentum that is now appearing across the industry as a whole. To accelerate the impact of these changes, industry leaders will need to act through networked efforts that involve the extended credit union community. The credit union difference must be evident to the communities we serve as well as the broader market.




Dec. 11, 2006



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