Partnerships That Could Pay
DES MOINES, Iowa-It's time for the credit union to get creative with lending in planning sessions, because the plain vanilla 2.9% auto loan rate is not going to cut it anymore.
There simply is too much competition for loan volume today that the CU cannot rely just on rate and open doors, offered Jeff Russell, senior advisor for The Members Group. "There is so much competition in auto lending and still a fair amount in mortgage, home equity, and credit cards. So what other types of loans and other types packaging can credit unions come up with to lend in their local market?"
Russell said a good differentiation strategy is forming partnerships with local businesses. "I think the question is how do you structure the loan program to fit the member rather than the product category," offered Russell. "For example, I know a credit union that did a lending program with a medical facility for elective, non-insurance-covered procedures-LASIK, cosmetic, and bariatric procedures. They credit union partnered with the medical facility and basically became their preferred lending option. If patients came in and said they could not afford the procedure, they referred them to the credit union for a loan-almost an indirect lending relationship."
The fast-evolving payments landscape, too, calls for CU strategic planning attention, according to Russell. "So many changes happening in payments-Durbin, the rise of alternative payments like Dwolla and Google Wallet. Credit unions have to have a plan for how they will react."