Combine these strategies to turn around your credit union’s program 

by Celeste Cook

What can successful credit unions do to create more loan opportunities in a slow-moving economy where bankruptcies and unemployment remain exceedingly high and consumer confidence is stuck in the cellar? There’s no single strategy that can lead to significantly increased loan opportunities. Rather, Credit Unions achieving significant loan growth in these tough times have usually implemented several innovative lending strategies.

Carolina Postal Credit Union in Charlotte, N.C., for instance, increased loan volume in April 2013 to just shy of $2 million—compared to $952,537 in April 2012 and $824,063 in April 2011—by establishing a credit scoring and analysis program.

This program helped the Credit Union help members improve their credit scores, reduce their total monthly payments by refinancing loans from other financial institutions and rolling over high-interest rate credit card debt from other financial institutions into the equity of the members’ autos and/or homes.

The Credit Union also created excitement and engagement by sharing success stories credit-union wide of how much money members were saving through the program, and how much their credit scores increased as a result of their efforts.

Listed below are 10 steps you can take to cultivate a proactive lending culture that creates more loan opportunities, while increasing profitability and retention:

1. Transform your front-line staff into credit score specialists:
   1. Teach them how to calculate a credit score and increase a credit score up to 100 points in 60 days (see one example in No. 5, below);
   2. Teach them how to identify ways to lower monthly payments and/or the total amount paid in debt service each month by refinancing loans from other financial institutions and eliminating high-interest-rate credit cards from other financial institutions. For example, by lowering someone’s auto payment and eliminating credit card monthly payments, the total amount the person pays out each month for total debt is reduced. This ultimately reduces the debt-to-income ratio.
2. Offer free credit score analyses: Not all consumers know about their credit scores. By offering free CSAs, your credit union will become a highly valuable resource for your members.

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