Posted by Lisa Hochgraf
I recently proofed the soon-to-mail August issue of Credit Union Management. In it, the article "Loan Zone: After the Golden Age" by Bill Vogeney talks about what credit unions can do now that consumer credit growth has likely reached its limit.
Bill, SVP/chief lending officer at $2.5 billion Ent, Colorado Springs, Colo., offers more than one piece of sage advice in his article (as usual), but here's the one I'd like your opinion on:
"CUs, including ours, will have to get better at making loans to consumers who don't have perfect credit."
Bill supported his assertion by saying, "We should be able to capitalize on our member relationships, asking members tough questions about their credit problems, in order to do a beter job of identifying who will pay. Credit scores probably won't give us what we're looking for; we need an 'old school' approach with quality loan applications and an emphasis on knowing our borrower better than our competitors do."
What do you think? Are credit unions poised to do this? Is now the time?
If you'd like a preview of the magazine article, please say so in your comment. You may also want to read this CUES column from nearly five years ago, in which Peter Duffy predicted that continuing to work with consumer credit could only take credit unions so far. (Duffy, associate director with Sandler O'Neil and Partners, will speak at both CUES' Execu/Net and CEO/Executive Team Network this year.)
