ORLANDO, Fla. — Is there a prime opportunity for credit unions in "prior prime" members?
Mike Hales, EVP-strategic relationships with the CUSO CU Revest thinks so. According to Hales, there still is a "negative American credit crisis" despite an overall perception that the economy has improved.
"Everybody here knows people who have come out of the recession in worse shape than they went into it," said Hales in remarks at a meeting here sponsored by the San Diego-based CUSO.
"Those people have gravitated to a whole new world of financial services," he noted. "What's happened is that these alternatives--some good, some bad--are eroding your marketshare without you even knowing about it, because they are affecting members you may have forgotten about. But these are people who can bring life-time value back to the credit union."
And these are the members Hales calls "prior prime."
"These used to be prime members whose credit scores have deteriorated," he explained. "Prior prime members no longer qualify for traditional loan products, so they turn to payday loans, rent-to-own agreements, refund anticipation loans, etc."
This is a market that in 2012 alone was worth $792 billion and generated $89 billion in revenue, according to Hales.
"The problem is there are folks who are taking a direct hit and we need to do everything we can to help those who want to work their way back into the credit union," said Hales, whose CUSO works with members to help get them back in good financial standing.
Owners of the CUSO include ORNL, Desert Schools, Kinecta and TDECU.
