As I look at the competitive marketplace, I see some fundamental changes going on that can be a blessing and a curse to credit unions. I won’t mince words: Many of the big and mid-sized banks are losing their taste for consumer and mortgage lending.
On the mortgage side, many of the big banks have virtually abandoned Veterans Administration and Federal Housing Administration lending. They’re focusing on jumbo loans—so much so that they’re again pricing them lower than conventional loans. Their objective? Ultimately, jumbo mortgages can drive another segment of their business: wealth management.
Readers of American Banker know this all too well, as everyone from community bankers to the “big boys” are investing heavily in their wealth management/private banking operations. Jumbo loans are not only bigger loans, but a feeder of prospects for the wealth management side of the business. As a result, I think we’ll see credit unions ready to pick up a lot of the conforming loan volume in coming years.
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