The reopening of local economies and the return of pre-pandemic consumer spending habits have mostly offset the role pandemic relief programs have played in recent growth. According to the New York Fed’s Center for Microeconomic Data, the number of credit inquiries have returned to 2019 levels. And thanks to additional post-CARES Act policies at federal and local levels, as well as lender concessions, total loan delinquency remains well below pre-pandemic rates. For all U.S. credit unions, delinquency was 0.46% as of Sept. 30, 2021.
Year-to-date loan originations at U.S. credit unions increased 19.2% versus the same period last year to $594.8 billion. Consumer originations accounted for the lion’s share, 49.3%, of this new growth.
Loan balances increased 2.5% quarter-over-quarter. Used auto and first mortgage balances expanded 3.5% and 3.1%, respectively, and drove much of this growth.
Learn how credit unions performed in the final quarter of 2021 in Callahan’s fourth quarter Trendwatch webinar. Attendance is free but space is limited. Register here today.
Finally, after extended balance paydowns, credit card balances grew 2.3% quarter-over-quarter. This represents the highest quarterly growth rate since 2019.
Industry lending remains strong, and consumer channels are thriving. Even as government relief efforts are winding down, credit unions are staying true to their mission of helping members via new loan products and lenient repayment options.
Here are three ways credit unions served members and made loans in 2021. Let them serve as inspiration for 2022.
Serve With Seminars
Interra Credit Union ($1.5B, Goshen, IN) hosted its first Home Seller’s Seminar in August of 2021 to help members capitalize on a strong real estate market and avoid potential pitfalls. It also helped the cooperative stand out from competitors.
A panel of local real estate agents shared insider tips and best practices, educating members about the ins and outs of buying and selling a house. Credit union mortgage representatives served as event hosts and answered questions after the event.
The seminar helped Interra make inroads with attendees and real estate agents alike. More importantly, it established a precedent for a range of possible future events.
Todd Potter, senior vice president of mortgage services for Interra, advises credit unions to consider the needs of distinct audiences when planning seminars. He also urges leaders to think creatively.
“Look for opportunities that are different and approach them with an educational mindset,” Potter says. “From general home-selling to specific transactions resulting from divorce or probate, embracing community experts can help you identify common challenges for your members and provide the resources they need.”
Learn more in “Home-Selling Seminars Benefit Members And Boost Business.”
With average lows in January hovering around 10 degrees and the average annual snowfall exceeding 90 inches, energy efficiency in Vermont isn’t just a nice idea — it’s a matter of survival.
That’s why VSECU (Vermont State Employees Credit Union, $1.1B, Montpelier, VT) began offering energy efficiency loans to members more than 15 years ago. And it didn’t take long for demand to grow.
The credit union’s green lending portfolio grew to $2.5 million within a decade and today has grown to $92 million. The program supports weatherization, solar arrays, home battery backups, green vehicles, and even electric bikes.
“VGreen loans are for anything that eliminates or reduces fossil fuel usage,” says Laurie Fielder, who became director of VSECU’s VGreen program in 2013. “Our products are designed to maximize these purchases. They have discounted interest rates compared to our regular loan offerings and either extended terms or specialized terms to maximize the economic benefit.”
Over the years, VSECU has created a variety of loan products to meet Vermonters’ needs. To date, its portfolio includes short-term and 20-year energy improvement loans, state-subsidized home energy loans, loans for vehicles with a fuel efficiency of 35 miles per gallon or more, energy equity loans, and business energy loans. It also offers off-grid mortgages for members who want to completely unplug.
Learn more in “The Brave New World Of Green Lending.”
Pay Back Perks
What began as a pilot program at Wings Financial Credit Union ($7.8B, Apple Valley, MN) is now a permanent fixture in the enterprise’s rewards program.
Taking inspiration from retail giant Target, the Minnesota cooperative started offering a 0.50% rate reduction on vehicle loans as a credit card rewards option in May 2021. The program was so successful, the credit union decided to continue it when the two-month pilot ended.
“Target rewards shoppers with a generous sales discount when the Red Card is used,” says Mike Sahr, vice president of payment systems at Wings Financial. “It’s a unique reward that only Target can offer. We brainstormed internally on how we can do something similar and came up with the loan interest buy down option.”
According to the credit union, approximately one member every three days takes advantage of the offer, and 42 members with auto loans totaling approximately $787,000 had taken advantage of the offer by late August, using 1.1 million reward points to save $9,000 in interest.
“We want to reward those members who are most engaged in the cooperative,” Sahr says. “The more value our members see in membership, the more loyal they will be to Wings.”
Learn more in “Interest Buy Downs Take Flight At Wings Financial.”
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