Lending Perspectives: Need to pump up your loan growth?

When it comes to loan growth, it’s a challenging time for credit unions—perhaps even more challenging than the years following the 2008 financial crisis.

Why? First of all, virtually all financial institutions have seen incredible growth in deposits from the series of COVID-19-related stimulus payments, an influx that is putting extreme pressure on the balance sheet. Making loans will help credit unions put all these deposited dollars to work.

In addition, consumers are paying down credit card and other non-mortgage debt at a pace not seen in 40 years. Plus, a massive refinancing of mortgage debt is taking place. In all, credit unions need to worry not only about making more loans but also about finding a way to generate substantially more income through higher yields on other loans.

While I’ve been working on this for Ent Credit Union’s benefit, I also have been thinking about ideas any credit union can use. My longtime friend and former employee Genice DeCorte, CEO of HealthShare Credit Union in North Carolina and a member of the Carolinas Credit Union League small credit union peer group, recently asked me to do a session for the group on loan growth. While my ideas are suitable for credit unions big or small, here are some of my recommendations I recently shared with this group of credit unions under $100 million:

 

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