COLORADO SPRINGS, Colo.-Sometimes the best news for credit union loan growth is, ironically enough, bad news.
"The biggest part of our growth has been in mortgage loans," said Bill Vogeney, SVP-chief loan officer at Ent FCU, which is reporting 13% total loan growth for 2008. "In 2009, we'll probably have to slow that growth by selling them to Fannie Mae because of asset-liability concerns. We're concerned about the continued pace of growth in mortgages compared to the regular portfolio."
Vogeney believes that credit unions nationwide did a great job in mortgage lending in 2008. He attributes that to the reduction in competitors. "A lot of lenders exited the business," he said.
Vogeney also believes a desire by borrowers to find an institution they can trust has played a role. "For many, that meant turning to their credit union, when they may not have done that in the past," he said.
For Ent FCU, specifically, Vogeney attributes its success in mortgage lending to the close relationship it has worked to develop with Realtors over the past few years. "That helped us in 2008," he said. "The word has spread. We have real estate agents calling us with a sale pending because the lender has backed out. That word has spread among the Realtor community."
Vogeney also noted that the 193,000-member CU's auto loans have also grown faster than the national average. "Three years ago we started sharpening our pencil," he said. "We've come up with some special financing plans."
The credit union has also been working closely with local Toyota, Honda and Subaru dealerships. "The more fuel-efficient dealers haven't been affected as much (by the economic slowdown)," Vogeney noted.
In home equity loans, the credit union has also seen some growth in its portfolio this year."I attribute that to us having a really good sales culture here," Vogeney said.
For other credit unions looking to increase their loan growth, Vogeney's advice is to remain as consistent as possible with credit policies."I've seen lending go through several changes," he said. "When times are good, they ease up credit. When bad, they tighten up dramatically. It's only going to make your delinquency situation worse. My word of advice is to remain as consistent as possible. It's really a fine line for credit unions right now."
