KALAMAZOO, Mich.–Consumers CU has created a loan product for members approaching retirement.
CCU's Silver Lining Lending is targeted at members age 50 and older who are looking to consolidate debt or accelerate the remaining term of their mortgage.
"We identified that there were folks that were using our home equity product this way," said Steve wpens, VP of lending at the $364-million, 44,000-member CU. "It was essentially a response to member needs."
Owens added that the product not only fits with an existing product at the CU, but that it fits well into Consumers' mission and its portfolio. "It's driven by the environment," said Owens. "You've got folks in their 50s and 60s where it's a tough economy, and maybe they've had some setbacks along the way trying to get to their retirement goal, so we're presenting this as a solution."
Rates, Terms & Underwriting
Rates start as low as 2.99% for a five-year term, and the CU uses the same underwriting criteria it does on other home equity products. Owens said that Consumers booked 17 Silver Lining loans in January for a total of $498,000. The average rate on those loans was 5%.
"We have found that we're not primarily refinancing our own debt," said Owens. "We're taking out other second liens, other first liens, auto debt, credit card debt, and the majority of it is not refinancing debt that's already on our balance sheet." Rates are the same for members who want to refinance loans they already have with the credit union.
For now, Consumers CU has not done any kind of data mining or used any sort of service bureau to seek out members or non-members who might qualify for Silver Lining Lending. Owens said that since the product was quietly launched in October, member service representatives have been successful cross-selling it to existing members. But he added that it may become more active in marketing it in the future.
The product is also available to younger members, but it is not marketed under the same branding.
The average Silver Lining loan is between $25,000 and $30,000, and Owens said that because the loans are short-term–most are between five- and seven-year terms–it amortizes quickly. "It's almost like putting on larger balance auto loans," noted Owens.
