Lending Feats From 2015

Check out how these forward-leaning credit unions took advantage of a growing economy and responded to regulatory challenges to keep loans growing.

 
 

The hits just kept happening on the lending front for credit unions in 2015. For example, according to the third quarter Trendwatch report from Callahan & Associates, mortgage origination growth hit a record high. That's on top of year-to-date loan originations hitting a record high earlier in the year.

Across the country, innovative managers with a finger on the pulse of their community and an eye for the latest tools are executing diverse loan programs. Here are some of the reader favorites covered on CreditUnions.com.

We were losing some of the passion to fight for loans.

 

The Trouble With TRID

It’d be hard to find any new reg that set more teeth to gnashing in credit union land than the new mortgage disclosure rules that took effect this fall. Combining four forms into two sounds like no big deal, but it involved a choreographed dance among forms vendors, lending systems, compliance folks, real estate agents, closing attorneys, and mortgage officers that still isn’t done. State Employees’ Credit Union ($31.2B, Raleigh, NC) tackled the regulation head-on. In this article, the credit union shares its step-by-step post-TRID checkup.

Serious Business In Recreational Lending

A tiered pricing matrix that helps power instant loan decisions has helped TruStone Financial Federal Credit Union ($1.0B, Plymouth, MN) increase its portfolio of motorcycle, boat, and RV loans by $1.5 million, to $7.5 million, in two years. That’s a lot of business but also a lot of risk. Recreational vehicles are luxury vehicles, and “people will stop paying on them before they stop paying on their car,” says Jeff Smrcka, vice president of lending at TruStone. To responsibly take advantage of the opportunity presented in the outdoors-happy Twin Cities market, the credit union put together a pricing and underwriting system drawn on best practices from around the country and its own good sense. Check it out.

Taking Short-Term Mobile

Washington State Employees Credit Union ($2.3B, Olympia, WA) has gone mobile with a pair of short-term loan solutions that already have produced approximately $2.7 million in fee and interest income since their launch, representing about 16 basis points of the credit union’s ROA. WSECU first began offering the two products — QCash and QCash Plus — a decade ago. It added online applications in 2009 and launched mobile applications for Apple and Android devices last year. But don’t call them payday loans. “This solution is proving attractive to a wide spectrum of ages and socioeconomic status,” says Ben Morales, WSECU’s chief technology and operations officer. Find out just who, and more here.

This solution is proving attractive to a wide spectrum of ages and socioeconomic status.

Direct Vs. Indirect: Tales Of Two Strategies

Credit unions that did not engage in indirect lending and participation loans increased their loan portfolios by 7.41% last year compared with 10.82% growth for the industry as a whole. But that doesn’t mean direct lenders can thrive. Three credits that prove the exception are California Credit Union ($1.5B, Glendale, CA), Western Heritage Credit Union ($79.0M, Alliance NE), and Ferguson Federal Credit Union ($57.5M, Monticello, MS). Each took their own path.

At Heritage, president and CEO Kurt Schmidt mothballed the credit union’s stagnant indirect lending program, focused on team coaching and motivation, and restructured loan approval authority and limits. He also moved lending decisions from volunteer board members to staff. “We were losing some of the passion to fight for loans,” Schmidt says. See what others say here.

Meanwhile, Oregon Community Credit Union ($1.4B, Springfield, OR) has leveraged its indirect lending relationships to drive its market share to new heights. In fact, OCCU is the No. 3 auto lender in Oregon, trailing only big bank Wells Fargo and captive lender Toyota Motor Credit. “We have made a strong commitment to indirect lending as a vital part of our strategic lending plan,” says Jerry Liuhdahl, OCCU’s chief credit officer. “Being a community charter credit union, we have the opportunity to partner with auto dealers in the highest population areas of Oregon and we have been able to expand our indirect program across the state. To learn more, check out this Q&A with Liuhdahl here.

Giving Businesses The Business

Building a successful business services business takes time. At 1st MidAmerica Credit Union ($633.8M, Bethlato, IL). Ten years in, the Illinois credit union has an MBL portfolio of approximately $35 million, representing 256 borrowers and some very deep relationships. But it’s more than just “knowing your borrowers.” The two executives in charge of that effort share best practices here on how they do it.