HFFCU Offers Members Ways To Lower Rates

How low can they go?

Well, according to Tom Rowlands, VP of Lending at Houston Fire Fighters Credit Union, as low as necessary to attract business.

Beginning Jan. 1, HFFCU's highest secured loan rate on a new vehicle was 5.45% for 72 months. For 60 months, the rate was 4.9%; 48 months, 4.65%, and 36 months, 4.15%.

Members also have the option of knocking off another 100 basis points-there's a 50 BP reduction for applying via an online application, and another 50 if they are first-time borrowers. With low earnings on investments in 2002 and an expected repeat this year, the CU's board decided to give the members a break and, at the same time, get a higher return on their money.

The New Year promotion is the CU's second loan rate decrease since getting a weak response to its fall promotion that offered 24-month loans at 2.4% interest and 72 month loans at 7.2% interest. "I don't know if it was the economy or that people were concerned about pending war and were more cautious with their finances, but (that promotion) didn't fare well at all," he said.

Rowlands also surmised that recent reports that 2002 marked the lowest holiday spending by consumers in 30 years couldn't be ignored.

While there is risk involved for the longer-term loans, Rowlands said, most of HFFCU's members pay off their loans early with the average turnover at 27 months.

If the rates do spike in the next few years, he said, the CU would compensate by raising all secured loans by 100 basis points, if necessary. Rowlands said the CU plans to promote the loan rates through its February newsletter and fliers that will be sent to its sponsors.

In addition to the reduced vehicle loans, Rowlands said, HFFCU was offering a special "tax loan" of $2,500 for 24 months at 2.4%. "That one was only available for 30 days," he said.