ORLANDO, Fla.-At a time when people are just happy to still be employed, convincing people to borrow money is no mean feat-one reason CUNA is predicting an average loan growth of 5% for U.S. credit unions in 2008.
While final numbers for 2008 are still being tallied, CU Journal reached out to several credit unions whose loan growth far exceeded that 5% figure to learn how they were able to continue to be successful in what was otherwise a dismal market.
CUNA VP-Research and Advsory Services Doug Benzine shared some reasons behind the 5% loan growth forecast. "Lending trends are influenced by a lot of things: demographics, membership growth, what's going on with the economy," Benzine said. "Interestingly, mortgages are still the fastest growing loans for most credit unions despite-or perhaps because of - the mortgage crisis."
Perhaps one of the most telling factors was the average age of members. "If the average of your credit union is 48, that means they are no longer in their prime borrowing years, so what does that do to your job [as a credit union loan officer]," he asked. "The typical 48-year-old is saving, not borrowing."
Just as problematic: the lack of membership growth. "We are barely keeping up with the U.S. population," Benzine observed. "Credit union membership growth is almost entirely in the negative, not simply flat."
Benzine suggested CUs will have to look to new products and services, as well as rethinking how they position some of the old standbys, in order to breathe new life into their loan portfolios.
Below are profiles of three credit unions that had double and even triple the amount of loan growth CUNA is forecasting for the industry as a whole, and the strategies they used to accomplish that.
