Credit Union Magazine - January 2009 - (Page 37)

CUNA Lending Council award winners turn economic drop into market share gains. Karen Bankston The dramatic economic downturn of 2008 caught many by surprise, but executives of credit unions honored with the 2008 Excellence in Lending Awards detected the first tremors in 2007 and earlier. They adjusted their lending processes and promotions accordingly. The rewards of that foresight include market share gains, steady delinquency rates when other lenders have seen sharp increases, a growing reputation for can-do lending, and recognition through the ninth annual awards presented by the CUNA Lending Council and CUNA Mutual Group, Madison, Wis., last November. Consumer lending < $250 million in assets Person-to-person marketing US Community Credit Union, Nashville, Tenn., with $114 million in assets, has a unique vantage point on the financial meltdown. As the former US Courthouse Credit Union—federal employees remain a core membership group—its main office is across the street from the U.S. Bankruptcy Court, Middle District of Tennessee. The state tops the nation in bankruptcy filings. Despite that proximity, the credit union’s delinquency and charge-off rates have been on a downward trend, though they took a slight uptick in October. “If you grow loans as quickly as we have, your delinquency rate naturally goes down, but we’ve seen a decrease in the numbers of delinquent loans as well,” says CEO Cheryl Thompson. She stresses the importance of proper underwriting procedures and the newness of the loans as factors behind such a result. Offsetting the economic downturn seems to have jumpstarted front-line sales and innovative lending initiatives. Consumer loans increased to $61.2 million in July 2008 from $48.5 million in December 2006. Thompson credits a new commitment to “person-toperson marketing” and cross-sales tracking. In a stalled auto market, US Community opted not to go into indirect lending. Instead, it built referral relationships with five area used-car, motorcycle, and recreational-vehicle dealerships. “When potential members go into those dealerships and ask about financing, they send them to us,” explains Cindy Babin, senior vice president of lending. That gives the credit union a face-to-face, relationship-building opportunity, and US Community makes it worthwhile to visit a branch by offering competitive rates. When members stop buying cars, you still can grow loans through refinancing. Most of US Community’s recent auto loans have been lured from other lenders. “We’re always promoting some sort of refinancing offer,” such as a grocery gift card tied to shopping for holiday feasts, Babin says. Another critical metric at US Community is increasing the loan-to-share ratio, which stood at 58% in December 2006, compared with a peer average of 81%. The credit union narrowed the gap by June 2008 to 65%, Focus u A new commitment to “person-to-person marketing” and cross-sales tracking increased consumer loans 26% for US Community CU. u Streamlined procedures and dealer incentives led to auto lending success for SAFE FCU. u Board focus: Award-winning lenders sensed economic trouble early and acted on it. cuna.orgÉ JANUARY 2009É CREDIT UNION MAGAZINE 37 http://www.cuna.org

Table of Contents Feed for the Digital Edition of Credit Union Magazine - January 2009

Credit Union Magazine - January 2009 Contents On My Way Leading Edge Spotlight President's Perspective Game Plan Washington Insider Wright Stuff Executive Suite Reverse Mortgages Come of Age Six Merger Myths Leading-Edge Lenders TwentyFour/Seven Bankruptcy Compliance Tools of the Trade Trendlines Rates & Ratios Council Corner Shoptalk System Scan Marketplace Branching Out Advertiser Index

Credit Union Magazine - January 2009

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.