Partnership Formed To Help CUs Boost Net Income

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Three organizations are joining in a concerted effort to help credit unions boost net income.

CUNA, CUNA Mutual Group and the American Association of Credit Union Leagues (AACUL) said they have formed a new partnership to "motivate and train credit unions in cross-selling and other key strategies to enhance their growth, member satisfaction and level of service."

The organizations said the plan is to "address less-than-desirable net income levels prevalent at many credit unions." The groups noted that although the 9,554 federally-insured credit unions ended 2003 with an average return on assets of 98 basis points (0.98%), more than half (5,198 credit unions) had an ROA of less than 70 basis points. "Of greater concern, more than 3,000 credit unions (3,274) had an ROA of less than 40 basis points, and 1,211 credit unions had a negative ROA," they said.

"Many credit unions today have ROA levels lower than they would like to see, and rising interest rates will only make matters worse," CUNA CEO Dan Mica explained. "Our new partnership will leverage the respective strengths of CUNA, CUNA Mutual and the leagues to help credit unions improve their performance."

CUNA, CUNA Mutual and the leagues said they will address related issues in publications, through league and chapter meetings and in related materials.

"Programming and materials will explain the opportunities that exist through cross sales, sale of lending-related ancillary products, best practices, and case studies of successful lending activities, including such strategies as risk-based lending," the organizations said, emphasizing that plans call for expanding training as a "critical component" of the partnership.

AACUL has established a new task force devoted to assisting this partnership chaired by John Radebaugh, president/CEO of the North Carolina Credit Union Network.

John Franklin, CUNA executive vice president and COO-Madison, outlined the partnership and its goals in a presentation to league leaders last week at the AACUL Summer Meeting in Paradise Island, Bahamas. "Your member credit unions will be the ultimate winners," Franklin told the group.

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