DALLAS -
"There's a great opportunity here for credit unions, but don't forget about your underwriting," said Scott Wagner, EVP of TNB Card Services here. "Now is a great time to be reaching out with credit, but you still have to take a disciplined approach to underwriting."
After all, that's what got so many subprime lenders into trouble in the first place, he noted. But just how big of a problem is really out there?
"When you look at the economics underlying all this, the situation is really not that bad," he said. "In fact, if you're not in the business of subprime lending, you might look at this as a well-deserved, well-earned correction."
Wagner wasn't alone is suggesting now is a good time for credit unions to reach out with credit-albeit carefully. CSCU's Cassie Ricks and PSCU Financial Services' Kenton Potterton agreed that credit unions are in a good position to find opportunity in the current marketplace. Here are some of their suggestions:
* No knee-jerk reactions. "It all depends on where you are today. If you've been running a loose score card, then maybe it's time to tighten it up," Wagner advised. "If you've been conservative, you may just want to stay right where you are."
* Know your market. "Housing values in Detroit are down almost 8%, but here in Dallas it's actually up about 1.5%, so it depends on your footprint. You've got to know your market," Wagner said.
* Consider new analytics. Both Wagner and Potterton said CUs should take a closer look at risk-based pricing. Behavior scoring, Wagner noted, is worth evaluating.
* Slice and dice. Credit unions need to do a better job segmenting their portfolio so they can almost "laser target" their marketing.
* It's beginning to look a lot like... Visa's and Mastercard's Holiday promotions kick off in October, Ricks noted. "They always come too fast, but it's time to be thinking about the holidays," she said. "It's always a big time for cards."
