LA HABRA, Calif.-American First CU has tightened up its underwriting but is still trying to get out the message that the credit union does have money to lend in the midst of the ongoing credit crunch.
"Underwriting is tightening up everywhere, including at our credit union," said Ryan Zilker, vice president of marketing and strategic planning for the 73,000-member credit union. "That said, we are actively trying to get the word out that we are still making loans. We're focusing on our time in the community, financial soundness and insurance as a way to attract new members, new deposits and new loans.
"This tightening is across all consumer products," Zilker continued. "We feel that credit quality is going to be of utmost importance over the next few years. And we are continuing to work with members who are struggling, doing what we can to help them remain in their home or car."
The $676-million CU hasn't launched any new products during this time, and is focusing on the products that are in highest demand right now-in particular, secure deposits.
"We are also actively trying to get the word out to members that we have money to lend," he said. "For members who already have loans with us, and might be struggling, we're definitely offering workout loan options. In rare cases, we've even been able to forgive some loan interest for struggling members as a way to help them remain in their home."
One thing that hasn't changed: its pricing strategy.
"We continue to price to a target margin on all products," Zilker said. "We've seen some deposits chase higher rates at struggling institutions, but for the most part our pricing continues to be better than local banks, and our members are happy with that."
Like other credit unions nationwide, American First CU has changed its marketing message recently, to focus more on safety and soundness.
"In this type of environment, I think it is paramount that we reassure the market that we are safe and secure," Zilker offered. The credit union is also actively reaching out to members that have had a material decline in their credit quality.
"This is a proactive step to mitigate future troubles the member may experience, and future losses for the credit union," Zilker said. "We've offered workout loans and to restructure debt. We also offer free financial counseling through BALANCE, and all affected members are given a referral to BALANCE."
