How To Set Lending Records

This week, showcases case studies from both large and small credit unions with excellent loan growth metrics, as well as looks at some larger lending trends.

Post-recession, the credit union industry has posted record loan growth quarter after quarter. And based on second quarter 2016 data, that hasn’t changed.

This week, showcases case studies from both large and small credit unions with excellent loan growth metrics, as well as looks at some larger lending trends.

The word is out in one upstate New York community that Great Meadow Federal Credit Union is the place to go for financial services.

GMFCU’s second quarter loan-to-share ratio of 88.3% bested the 77.7% national average and 57.6% average for credit unions of $20 million to $50 million in assets, according to data from Callahan Associates

Loan growth, share, and member growth also were well above peer averages. The average credit union of its size lost members year-over-year in the second quarter, whereas Great Meadow grew its roster by 28.0%.

See how the upstate New York cooperative mixed mobile offerings with online adn in-person social relations to drive member, share, and loan growth in Great Meadow FCU Scores Big While Thinking Small by Callahan senior writer Marc Rapport.

With nearly 6,000 credit unions reporting second quarter data, Callahan Associates projects the credit union industry will break records in first mortgage origination and market share.

But while real estate loan growth is strong, lenders should take portfolio quality and state-level trends into consideration. Learn more in Credit Unions Set A Record For Dollar Amount Originated by Callahan senior industry analyst Michelle Parker.

The median credit union loan portfolio expanded 4.4% year-over-year. Performers in the top 20th percentile posted 12.8% growth while credit unions in the bottom 20th percentile posted negative growth of -3.7%.

Growth percentiles in major lending categories highlight opportunity and success in the credit union loan portfolio. See more in Lending Highlights From First Quarter 2016 by Callahan director of industry analysis Sam Taft.

Auto loans continue as a mainstay of credit union service to members, but as much as things stay the same, they’re always changing, too.

For instance, new car balances are growing as a proportion of the total market, and more strikingly, perhaps, indirect lending is building its lead over direct lending in total balances in the industry new and used after first nudging past it in the second quarter of 2015. That’s despite some misgivings among credit unions about the stickiness and quality of the relationships with members and dealers alike.

Learn more in Indirect Lending Grows Its Direct Impact On Credit Unions by Callahan analyst Liz Furman.

The CFPB’s proposed crackdown on payday lending products might make it difficult for Redstone Federal Credit Union to offer its own Member Solutions.

Member Solutions is a three-person operation that offers financial counseling, short-term loans, and loan modifications to struggling members of the northern Alabama cooperative.

The Member Solutions team comprises two experienced financial counselors and a 25-year consumer loan underwriter-manager working out of the Huntsville headquarters. The idea percolated for a couple years before the credit union soft-launched it in January 2015.

Read more about how the institution combines risk and reward in its counseling-lending program, and casts a wary eye at proposed CFPB changes in short-term loan regs in A Team Solution To The Payday Lending Problem by Marc Rapport.

Happy Reading!

August 22, 2016

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