The evolving credit crisis – How credit unions can respond now

by The CU Lab

The COVID-19 pandemic hit the US economy hard in the spring of 2020, yet many credit unions have yet to see the full impacts on their loan portfolios. While government stimulus and proactive steps by lenders have helped borrowers stay afloat, credit challenges are still likely on the horizon. Credit unions can prepare now by leveraging portfolio analytics to spot trouble before it arrives, and have the right processes in place for when it does.

Key Takeaways:

  • [03:32] Banks are reporting minimum increases in the things you would expect to see as warning signs like charge-off rates and delinquency rates. 
  • [11:20] Sophisticated modeling techniques are models that are built from lots of historical information, can tie variables together, and anticipate credit losses. 
  • [17:29] The credit unions that have a good understanding of their membership, markets, loan portfolios, and the ability to get some insight into those analytics may see some opportunities to expand into other product types.

 

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