Loan Growth Strategies for Smaller Credit Unions
by Scott Butterfield
A new year is upon us and with it comes a new budget and a new round of loan-growth strategies. While there are signs of life on the lending horizon (the most important being overall credit union loan growth is on the rise), the picture might not be as rosy as it appears.
According to the CUNA Economics & Statistics Mid-Year 2012 Summary of Credit Union Operating Results (September 18, 2012), loan growth is positive. However, larger credit unions with assets of more than $100 million are responsible for most of this growth. Loan growth among credit unions with assets of less than $100 million is very flat, even negative, for the majority of this group.
The following insights are targeted to credit unions with less than $100 million in assets—some 350 in New York, representing 80 percent of the state’s credit unions.
The Lending Landscape
The lending environment remains weak from the Great Recession, and now there is talk of a recessional “double-dip.” Unemployment is high and is expected to remain elevated for several years. Consumer confidence remains low, and the number of credit-impaired consumers is marching forward at a steady pace.
There is hope that the mortgage market has bottomed out, but the truth is that no one expects it to return to its glory days any time soon. Lest we forget, it was during those “glory days,” those decades of solid growth, where most of us grew our balance sheets.