A while back, one of this blog’s posts suggested 3 ways to improve lending at credit unions. This is a continuation (sort of.)
Almost every credit union that I’ve spoken with recently has told me that while many aspects of their business have continued to improve over the past year or so, one area of struggle continues to be lending. As you know, lending is critical to credit union asset growth and sustainability.
An article in yesterday’s Wall Street Journal entitled “Pickup in Lending Lifts Big Banks” states that banks are enjoying positive loan growth lately. The title of the article, while definitely attention-grabbing, may lead the reader to believe that lending was up “across the board.” However, upon reading the article I noticed that most of it dealt with the uptick that banks are seeing in commercial lending. Many credit unions, of course, engage in business banking programs which include commercial lending products. The good news is that if this article portrays an accurate assessment of commercial lending, the credit unions that have business banking platforms should benefit from businesses being more willing to borrow.
But I was left to wonder why the banks are not reporting increased loan numbers for consumer borrowing. It could be that getting a consumer loan from a large bank is still akin to breaking into Ft. Knox. It could be that large banks still don’t seem to want to serve the “little guy.” Or it could be that large banks do not have the desire to engage the average consumer. Now, before you think that I am talking “out of school” on this matter, remember that I came to credit unions after working for years for the big guys on the banking side. I still remember my employee number! That number was really our only means of identification. But I digress.
So what can credit unions do to attract consumers to their loan offerings? Well, I’ve said it before and I will continue to say it – credit unions should be atop the highest pedestal they can find and should be shouting as loud as they can that they are willing and able to lend money! Credit unions cannot be subtle about this!
Letting people know is just one step to improving borrowing numbers. Here are two others:
1. Talk to other credit unions that are posting great loan numbers. One of the many advantages of working in the credit union industry is the spirit of collaboration that exists. I don’t want to sound cliché but seriously, credit unions really are all in this together. So tap into your fellow credit union advocates to share ideas, best-practices, and strategies.
2. Review your loan policies and practices. It may be time for your credit union to take a fresh approach. If you continue to see a decline in loan numbers, it could be that your policies are outdated, your strategies are ineffective, or your employees are no longer motivated because they feel restricted because of those very policies and strategies.
Finally, take the opportunity to use the comment functionality below this post to start a discussion and get the ideas flowing.
Click here to read the WSJ article that I mentioned earlier.