KEY BISCAYNE, Fla. -
"These have to be win-wins," he told Credit Union Journal. "That means we need these businesses to be able to bring in $100 million in revenue or more in five years, because otherwise we can't build the scale we need, and they need to be geared towards helping to stop the shrinkage of credit unions. The goal is to drive members to credit unions."
Among the business lines CUNA Mutual is either exploring or has already added:
CUNA Mutual Group's 401(k)
"Our 401(k) product is the top-rated product, but unless you're a credit union, you can't buy it," Post related. Four credit unions are currently piloting four different models that would allow new access to CUNA Mutual's 401(k). One model would have credit unions sell the product to their business members. Another model would use outside brokers to sell it and then use the product as a means of introducing consumers to credit union membership. Another model calls for CUNA Mutual Group to sell it and then drive that business to credit unions. "It's a top-rated product and banks don't have it," he commented. "This is a real differentiation opportunity for credit unions."
Crop insurance
"We're well on our way to writing $130 million in policies, and we're going to make $13 million doing it," Post offered. "And we've helped drive some farmers to credit unions." Because farmers often participate in a variety of cooperative ventures, the cooperative model of credit unions should appeal to them, he added.
Private student lending
"This is still in the incubator stage," Post said, but noted that with some of the laws changing, as well as a change in some of the players, there's real potential in this business line.
Subprime Lending
"I know how that sounds right now," Post noted. "But we think there's a real opportunity here. About 35% of the loans that run through our LoanLink Center don't go anywhere because the member's credit doesn't meet the credit union's standards. We see the potential opportunity to turn around and fund those loans, pay the credit union for the referral, put our insurance products on them, then securitize them and sell them to banks or credit unions." The idea, Post explained, is to keep a member in the credit union system, rather than turning them away, leaving them to go to banks or predatory lenders.
International Business
Though CUNA Mutual Group has all but written off China, where credit unions are largely converting to banks ("if we wanted to serve banks, we'd already be serving them," Post commented), the company is looking very closely at other parts of the world, such as Mexico and the Caribbean.
