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CUNA Research Reports

CU Snapshot

 Jun '17May '17
# of CUs5,911 5,922
Members
(millions)
111.7111.2
Total Assets
($ billions)
$1,378.8$1,369.6
Total Savings
($ billions)
$1,172.6$1,156.8
Net Cap.
Assets
10.6%10.6%
Loans to Savings79.6%79.9%
Loan Delinq.0.7%0.7%

         Credit Union Indicators

Upheaval in Lending

Rethink your lending processes because the status quo won't cut it.

Much like the payments world, lending is experiencing an upheaval thanks to mobile technology and nontraditional competitors who want to disrupt the market, writes Bill Vogeney, executive vice president and chief lending officer for Ent FCU in Colorado Springs, Colo., in CUNA's 2015-2016 Environmental Scan.

Try these action steps to lead your credit union through the disruptive change:

Use proprietary member data to voluntarily disrupt your loan processes—or stand by as competitors serve your members.

Expect continued uncertainty over long-term rates affecting mortgage demand. Monitor worldwide events that, in a matter of days, can change the mortgage market from being dominated by purchase loans to refinance loans.

Consider offering a hybrid adjustable rate mortgage (ARM) with extended terms for the initial fixed rate, along with lower annual interest rate increases. This type of product positioning could stand out from the crowd—especially as affordability becomes a real issue in many higher-priced markets. Hybrid ARMs might also be attractive to millennial borrowers.

Manage excess liquidity with loan participations—a great tool if a buying credit union adequately conducts due diligence and continually monitors loan quality.

Watch the movement in short-term rates. They could have a dramatic impact on consumer loan volume based on your credit union's business model.

Plan for the continued erosion of noninterest income from interchange fees. The payments revolution will be a strong influence. This will mean your team must apply sound margin management as it oversees your credit union's loans and shares.