FORT LAUDERDALE, Fla. -
Take City County Credit Union here, for instance, which is offering an unsecured holiday loan for up to $3,000 at 12.99% for a 12-month term. "We have booked over $1 million this year and we're ahead of last year's volume at this same point," said Lloyd Gill, EVP/chief lending officer.
City County CU's holiday loan is promoted through a statement stuffer, newsletter article, branch posters and the credit union's own website. "We also pre-approve members who received a holiday loan last year if they repaid as agreed," added, Gill, who is also vice chair of the CUNA Lending Council.
In addition to holiday loans, Gill said that City County CU is joining with other issuers in promoting credit cards this time of year. "We have also seen a seasonal increase in credit card applications. Auto lending is slow right now, but that is also seasonal at our credit union."
City County CU will continue to offer the holiday loan through Jan. 31, "in case members want to consolidate high-rate store credit card debt," Gill said. The $270-million CCCU will also be promoting a Visa balance transfer rate of 6.99% for the life of the balance transfer, and will also have a home equity promotion centered around debt consolidation.
"I think home equity debt consolidations loans will be popular in the first part of 2008 at our credit union," Gill said.
Greylock FCU in Pittsfield, Mass., is seeing a mix of auto, personal, Visa, mortgage and home equity loans during the holiday season, said Christopher Moon, VP/manager of consumer loans for the 63,000-member CU. "Seasonally we are seeing more personal loans for debt consolidations and holiday spending," Moon said.
The $966-million Greylock FCU is promoting its loans through newspapers and radio, in addition to home-buying seminars, in-branch signage and local auto dealerships.
After the holidays, Greylock FCU will be promoting auto loans beginning President's Day weekend, with mortgage promotion beginning in April when the weather improves. With the Auto loans, Moon said GFCU typically ties in a special giveaway.
Another seasonally popular loan for Greylock FCU is its "fuel loan," Moon said, which is for the purchase of approximately one year of heating fuel for home use. "Our goal is to assist members by spreading out their high spikes of winter heating costs over a 10-month period," Moon said. "The maximum loan is for $3,000 and the interest rate is 5%." Promotion includes notices to local fuel providers.
Angela Halsey, director of marketing and business development for Montrose FCU in Montrose, Colo., said members are borrowing "but the end-of-the-month number for December will be the tell-all of the market."
Montrose FCU has seen an influx in its credit cards, as well as signature loans, Halsey said.
"We started our holiday lending in early November," she said. "We really tried to talk about the credit union's great signature loan rates as well as our always-fixed rates on our credit cards. In addition, our practice is to always see if collateral can be a factor. We have open-ended lending, so we encourage our members to see if there is any equity in their vehicles that they can use to their advantage."
About one-fifth of the $64-million MFCU's 5,800 members have a vehicle loan with it, comprising about 30% of its loan portfolio
Out Of The Holiday Pinch
Montrose FCU began promoting its holiday loans by sending out letters in October, which boosted signature loans 20%, Halsey said.
"This helps people get out of the holiday pinch but gives them a timeframe of repayment that credit cards don't," she said. "We didn't do a special promotion by any means. Who can get a signature loan for 9% these days? Anyone who is a member of MFCU and we're very proud of that."
After the holidays, "we can expect to see a lot of movement on the HELOC and mortgage refinance side," Halsey said. "Around here the normal patterns are if somebody didn't get a winter toy as a present for Christmas, they go out and buy one anyways. We have a great relationship with the local ATV and snowmobile dealers and they send business our way during the beginning of the year."
Montrose Federal will feature debt consolidation loans as part of its post-holiday marketing efforts, but will also reach out to "the people who still like to spend after the holidays," Halsey said. I want to be able to finance that one thing that wasn't under the tree. I don't believe in always having a special to promote your products and services. If you are doing right by your members, they have your special every day. My advertising will incorporate diamond rings, new trucks, snowmobiles, i-Pods, Xbox and Wii - the things that everybody wants in life."
Dana Rawlings, chief operations officer for Smart Financial Credit Union in Houston, said the CU is focused on signature holiday loans and lines of credit this season, with marketing aimed at current members.
After the holidays, she expects the 74,000-member Smart Financial to see an increase in debt-consolidation loans. SFCU will also be promoting credit cards and auto loans at the end of the first quarter.
