BURBANK, Calif.-Partners Federal Credit Union continued its aggressive, proactive search for more loans throughout 2010, and expects to extend its stance well into 2011.
John Janclaes, CEO of the $920-million credit union that serves Walt Disney Company cast members and employees in California and Florida, said as of Oct. 31 both loans and deposits had an annualized growth rate of 7%.
"Investments are at historic lows, so it is important to us to attract money and lend it out," Janclaes said. "We are trying to put out as much value to our members at a time when they need us most. Having that growth mentality even during tough times such as these keeps us innovating. A lot of our peers are just concerned about capital preservation. We think serving members involves growth."
Making Goals Come True
Partners has a larger plan for making all of its members' financial goals come true, which Janclaes said included doing workout loans. Over the coming months he expects to see many more members looking to the CU for help because they are still unemployed or otherwise are facing difficult situations.
"It is a matter of matching the credit union's need for safety and soundness with the members' needs," he said. "We have become more sophisticated in understanding these situations and have done a pretty good job of recruiting people and better training our own people. I would not recommend getting more aggressive in lending without that skill."
According to Janclaes, there was a short window of opportunity for financial institutions whose teams were well trained and aggressive while other lenders were on their heels in late 2009 to early 2010. He said Partners FCU will continue to focus on products and services for its members in 2011, with help from surveys produced by Raddon Financial Group to identify what members will want next.
For example, he said people have been holding onto their cars for the last two years, so he expects more activity in auto sales.
"But everybody else will be coming off the sidelines, so there will be more competition," he noted. "We are growth minded all the time, but at the same time we are discerning. We say 'no' to opportunities all the time if they don't fit our model."
Bill Throckmorton, manager of consumer lending, said the aggressive search for more loans is not so much a targeted program as a philosophy on how it wants to lend across the board. "And we've seen a lot of success," he said. "Since Jan. 1, we have booked 6,551 vehicle loans, of those 2,245, or 40%, were refi's. Vehicle loans are where we get the most of our loan types, by units.
Jeff Hays, senior manager of collections, said mortgage lending has been strong, noting that 2010 has brought 576 new first mortgages to the credit union. Of those, 119 were generated via its mortgage workout program for $22 million. These members had hardships due to unemployment, medical issues or other reasons. Through October, the credit union had done 387 Visa workouts, and 677 members received extensions on their credit card accounts.
According to Throckmorton, much of the success is in making sure its underwriters are looking at every opportunity to help the member and the CU at the same time. No application is turned away no matter how "ugly" it might look on the surface, he said.
"I think we've done a better job of taking applications, which helps our underwriters make better decisions," said Throckmorton. "We have done a lot of staff education this year and our staff is no longer order takers but decision makers. They are diving deeper into the application to make a better decision."
Hays said the education process has given Partners an opportunity because the marketplace has changed. "The times have required us to say we must explore different ways to do our business. We are trying to make a lifetime relationship with our members and that is by expanding services."
Every Contact Is An Opportunity
Every contact Partners has with a member is an "opportunity to enhance that relationship and share of wallet," Throckmorton said. "If the member calls with a question on one account, we use it as an opportunity to help them with other products. We are educating the staff on how to read between the lines on the credit report. Every member has a unique story and it might be different from the black and white on the paper. We are teaching them not to be afraid to ask the tough questions, asking why they are coming to Partners at this time, and other questions the credit report does not tell us."
Added Hays: "Not every 700 is equal-there are different mitigating factors. We gauge our underwriting not based on the credit score but on the member. The credit score is a driver for the interest rate we charge. There is a lot of focus on existing membership, but we've also focused on increasing penetration with our sponsor to grow membership. It is all about maximizing opportunities."
