SAN DIEGO-Credit Union Journal asked attendees at the recent CUNA Lending Council if they continue to see greater loan demand as a result of banks pulling back on lending, and if so, are they having to turn down more loans than usual because of the quality of the paper?
Fred Ryerse, SVP of lending, Members 1st FCU, Mechanicsburg, Penn.
We have a lot of people coming to us. We have the No. 1 market share in a six-county area of south central Pennsylvania in auto lending. In the last month or two, a couple of banks have come back into the market. We think they are flush with cash from TARP money. They sat on it for a year but now are trying to figure out what to do with it.
We are a consistent source of lending for our members. Loan growth is 10% this year. We have tightened our standards a little bit, and we price for risk. If members fit the range, we make the loan.
Jon Paukovich, VP of mortgage lending, Ent FCU, Colorado Springs, Colo.
We are having a record year in terms of mortgage lending. Many mortgage brokers left the industry, meaning there is less competition. We are seeing more FHA and VA government loans, which is right in line with industry trends. Those loans fill that subprime void.
We mirrored the changing standards of Fannie Mae, which tightened over the last year. But if someone can qualify for a mortgage, they can get a mortgage. Aside from FHA and VA loans, they have to have equity. Prices did not go up and down as much in our market as they did in California, Nevada, Arizona and Florida, but we are seeing some lower home values keep us from doing refinances.
Tina Bahmer, chief lending officer, Warren FCU, Cheyenne, Wyo.
Banks in Wyoming have tightened up, but we've been strong. We have been particularly strong in auto financing, which banks are not touching. We have had 20% annualized loan growth in 2009. We are rejecting more often as applications go up because of weaker credit. A lot of the problem is potential borrowers are carrying too much revolving debt already.
Glenn Middleton, chairman of the credit committee, MECU of Baltimore
In Baltimore, it is a lot easier to deal with a credit union than a bank. Banks have put up a lot of roadblocks for our members over the last 12 months. Our credit union, which has $956 million in assets, is doing a lot of SEG work. We are going out and talking to the workers, making sure they know the credit union is there for them.
The credit union is seeing an increase in applications this year, but the approval ratios have been about the same as before.
