6 lending strategies that make a powerful member impact
These credit unions rallied around the needs of members to uncover hidden potential in the loan portfolio.
The U.S. economic expansion hit a record-breaking 10 years and one month at the end of June 2019, and consumer sentiment hit a 15-year high in May.
For credit unions, the lending machine is going strong. Loan balances in the first quarter increased $77.6 billion year-over-year. Loan growth, however, slowed from 9.7% in the first quarter of 2018 to 7.9% in the same three months this year.
Total auto loans increased 7.8% annually to reach $370.3 billion as of March 31. With year-over-year growth of 11.2%, indirect lending played a significant role in the auto loan portfolio. Those loans closed the first quarter at $225.4 billion and comprised 60.9% of total auto loans versus 59.0% one year ago.
Despite such growth, the economics of indirect lending have changed. Whereas, historically, financial institutions set auto rates off the 2-Year Treasury, that hasn’t been the case in recent years, especially at credit unions, says Travis Goodman, advisory services principal at ALM First, a financial services provider for banks and credit unions.
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