RANCHO CUCAMONGA, Calif. -
“Whereas in recent years we saw all people needed to get a loan was a pulse, now they have to have documentation of income,” said Mendivil, economist and industry analyst for the California and Nevada CU Leagues. “There are fewer subprime loans, but those carry a higher interest rate.”
According to Mendivil, credit unions “need to put themselves out in the marketplace.” She said consumers will be shopping for loans and financial products, and they may be more hesitant about which financial institutions they do business with.
“They need to know they are eligible to join a credit union. If credit unions are visible in their community or field of membership, consumers will know credit unions are an option for them. Despite the fact credit unions have made great strides in this area, people often don’t know they are eligible.”
Credit unions will see their ROA continue to decrease in 2008, Mendivil predicted, but she added widening credit spreads “will supply some relief.”
“Credit unions will continue to experience growth in their loan portfolios, but it will be weaker than in the past and in different sectors than in past years. Overall, there will be growth, but more moderate in years past–for both credit unions and the economy.”
