Small credit union lending: Dealing with overspenders
by. Linda Webb-Manon
In South Plains, Texas, cotton is king. And many residents in the rural community of Lamesa work the land for their livelihood. Exceptional drought, however, has put many local farmers in a pinch. For credit unions like Caprock FCU who serve this community, this kind of situation can be bad for business.
“A drought can collapse our local economy,” says Caprock FCU president and CEO Dale Hansard. “It’s not uncommon for people in this community to work two or more jobs. During the week they may work in town at a local business, and on the weekend they plow fields and work the cotton crop.”
With budgets being stretched at home, Hansard says the credit union has started to see a slight uptick in late payments and overdrafts.
“It’s certainly not at a critical state, but we are monitoring the situation very closely,” he says. “We are empathetic to our members who are struggling to keep their heads above water, but we have to protect the interests of the credit union and the nearly 3,000 members who depend on us.”continue reading »