June 14, 2004


  • The changes in real estate loans that will be reflected on the Call Report are a step in the right direction. Risk and possible harm to a credit union's balance sheet can be discovered quicker by reporting quarterly. But there is another area that deserves as much, IF NOT MORE, attention on the Call Report. Credit unions need to report the activity of their indirect auto lending programs. Indirect lending represents a bigger threat to the economic livelihood of a credit union than real estate loans. Credit unions should report the number and dollar amount of loans they have received from dealers, subprime vendors, and the CUDL program. As more credit unions go community or expand their program to anyone who "breathes", the loan to share ratio and related margins will get smaller and tighter because so many credit unions are competing for the same individual(s). Enter indirect loans from dealers and subprime vendors. These short term fixes need to be reported on a quarterly basis to safeguard the share insurance fund.