LAS VEGAS - Bob Hoel reminded that the Filene Research Institute has uncovered the eight secrets of high-growth CUs, those it calls "stars":
* Star CUs are highly effective lenders-the No. 1 predictor of growth is lending. "Service is overrated, because everybody competes on service."
* Better wallet share-members at star CUs have more accounts, more loans, higher savings balances and higher loan balances.
* Higher savings rates paid, and an emphasis on CDs and MMAs-these higher rates fuel asset growth.
* Emphasis on high-payoff products, including used auto loans-"Used cars don't lose value like new cars do." Also emphasize mortgages ("Countrywide is a mess; this is a great time for credit unions to do mortgages."), checking accounts, and specialty savings products such as CDs and money market accounts.
* Aggressive management of expenses-star CUs have lower operating expense ratios and fewer employees per assets and per members compared to their lower-performing peers.
* A reliance on other aspects of lending besides low loan rates, including convenience, speed, good service, aggressive marketing and cross-selling.
* More fee income, usually by high checking account penetration or fee-generating products such as skip-a-payment.
* Investment of capital into growth, rather than letting the capital number build to excessive levels.
"Star credit unions invest in membership, product and service offerings, and growing their asset and loan portfolios. In short, they deliver member value while maintaining adequate net worth levels," Hoel said.(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com/ http://www.sourcemedia.com/
