TEXARKANA, Texas-It may not be a strategy that works for all, but Red River Employees FCU here is planning to take a bit more risk with its lending in 2012.
RREFCU CFO Sonya Jaynes said that in the coming year the credit union's loan officers will be looking deeper into credit scores and paying closer attention to the member's long-term relationship with the CU. If the member has a bad credit score but a good history of paying the credit union, loan officers may go ahead and make that loan.
"It's been hard to get loan growth," said Jaynes, member of the CUNA CFO Council executive committee, pointing out that Red River Employees already employs risk-based pricing. "We've had loan growth, but not what we had a few years ago. That's why we have to work harder to get those loans. Being a credit union, we need to focus more on taking care of our members, and if they need that car loan, we want them to see that we will help you."
The $582-million credit union serves 62,000 members. As of its September 2011 Call Report, RREFCU had 33,068 loans and leases on its books for a total of more than $336 million. Those figures include fewer than 1,000 real estate loans, but more than 15,000 auto loans totaling more than $200 million.
The catch is that RREFCU does not yet have a specific marketing strategy to appeal to members whose credit may show some impairments. In 2012 it plans to bring in consultants to train loan officers to better read credit reports and improve cross selling, but the outreach strategy is still in the works.
For now, she said, the plan is just to push all loan products. "We're going to emphasize: 'Loans-We've got 'em.'"
Jaynes is bullish on 2012. "We're anticipating that people will be a bit more positive and start spending," she said. "You always need a new car. It's just the pent-up demand, I guess. We hope that's going to loosen up a bit and they're going to go out and start shopping for a new vehicle, or a vehicle that's new to them. We're hoping they're going to see that there is a light at the end of that tunnel."
