January 15, 2015

Credit Union Trends Report: January 2015 (November 2014 data)

ECONOMIC, COMPETITIVE, AND REGULATORY ENVIRONMENT

Economic activity surprised on the upside in the third quarter with the government reporting the economy grew 5.0%, at a seasonally adjusted annual rate, and rose 2.7% year over year. Inflation moved in the opposite direction, plunging 0.3% in November as energy prices dropped 3.8%. Consumer prices rose only 1.3% during the last year, below the Federal Reserves’ 2.0% inflation target. The unemployment rate was unchanged in November at 5.8%, despite the economy adding 353,000 jobs.

The stage is set for economic growth to exceed 3% in 2015 and the economy to generate over 250,000 new jobs each month. This will put upward pressure on wages later in the year. The Federal Reserve will therefore seriously consider raising short-term interest rates sometime in the second half, albeit at a significantly slower pace than previous rate-tightening cycles in 1994 and 2004.

Report Highlights
  • During November credit union members borrowed and spent, credit unions recapitalized, inflation dropped, the labor market strengthened and economic growth accelerated.
  • At the end of November, CUNA’s monthly estimates reported 6,543 CUs in operation, down 42 CUs from one month earlier. Year to date the number of credit unions declined by 252, above the 242 lost in the first 11 months of 2013.
  • Credit union savings balances fell 0.1% in November, but rose 4.2% from one year ago. Year-over-year asset growth of 5.2% is outpacing savings growth due to borrowings rising 16% and capital rising 10%.
  • The nation’s CUs increased their loan portfolios 0.6% in November, a slight acceleration relative to the 0.5% pace set in November of 2013. Loan balances rose 10.5 during the last 12 months, the fastest pace since January 2006. 
  • Credit union memberships rose 303,000 in November to reach 101.9 million, a 0.3% increase from October, and 3.6% year to date. Year-over-year, memberships are up 3.9%, the fastest pace since June 2003 when the economy was recovering from the 2001 recession. 
  • Credit union capital grew 0.7% in November to help push the movement’s overall capital-to-asset ratio over 10.8%. Credit union loan delinquency rates fell to 0.77% in November, down from 1.03% set in November 2013. Credit union loan-to-share ratios reached a new cyclical high in November, breaching 74.5%, the highest since November 2010. This improved credit union bottom lines in 2014 and will continue to do so into the new year.

Total Lending

Credit union loan balances rose 0.6% in November, slightly better than the 0.5% pace reported in November 2013, and rose a strong 10.5% during the last year. With loan growth exceeding savings growth since March 2013, the credit union movement’s loan-to-share ratio reached 74.5%, up from a 66.3% cyclical low set in March 2013. This shift toward loans pushed CU yield-on-asset ratios to 3.4% in the third quarter from 3.33% in the second.

U.S. Households’ debt burden, measured by total-debt-to-disposable-income, fell to 97% in the third quarter of 2014, the lowest level since the third quarter of 2002, and down from the 124% record high set in the fourth quarter of 2007. The deleveraging phase of the business cycle appears to be coming to an end. So if households can keep their total debt growth rate less than or equal to the growth rate in disposable income, debt burdens will remain manageable.


Credit Union Consumer Installment Credit (CUCIC)

Credit unions’ consumer installment credit balances rose a robust 1.0% in November, or $3.1 billion, significantly above the 0.3% gain, ($0.6 billion) reported in November 2013. The surge in debt corresponded with a strong 0.7% growth in total retail sales in November. Retail sales were 5.1% above their year-ago level, the strongest growth since July 2013. Rising confidence, jobs, wages, wealth and real purchasing power drove the spending spree. During the last 12 months, credit union consumer installment credit balances rose a remarkable 14.2%, the fastest pace since July 1995. Excluding credit unions and guaranteed student loans from the aggregate consumer loan data reveals the consumer loan performance in the banking arena. We see bank balances are increasing at a modest 3.9% pace. 

Vehicle Loans

Credit union auto lending remains a bright spot with balances rising 0.8% in November, greater than the 0.7% reported in November 2013. Vehicle sales (cars and light trucks) rose to 17.2 million units on a seasonally adjusted annual rate in November, the second strongest month of the year, and up 5.6% year over year. Improving consumer fundamentals drove the strong sales number: strong job growth, improving household wealth, subprime borrowers with greater access to credit, falling gasoline prices, attractive discounting offers and favorable lending terms. During the last 12 months, credit union auto loan balances rose 15.4%, the fastest pace since May 2000.

Credit union new auto loan rates continue to beat bank loan rates by over one percentage point. Currently, credit union 5-year new-auto loan rates average 2.62%, 117 basis points below the bank average of 3.79%, according to data gathered by Informa Research Services. Expect auto lending to remain strong in 2015 as vehicle sales are expected to approach 17 million units due to the economy and labor market picking up momentum.


Real Estate-Secured Lending – 1st Mortgages and Other Real Estate

Credit union first mortgage loan balances rose 0.5% in November, faster than the 0.3% reported in November 2013, as credit unions continue to pick up a greater share of the mortgage market and fewer originations were sold into the secondary market. Credit unions now make up 7.9% of all U.S. first mortgage originations, up from a 2.5% average prior to the Great Recession. During the last 12 months, first mortgage balances rose 8.8% due to a 15.6% rise in adjustable-rate mortgages and a 6.1% gain in fixed-rate mortgages.

Notwithstanding the rising loan balances, first mortgage loan originations were down 30% during the first 9-months of 2014 compared to 2013. Credit unions originated only $68.7 billion from January through September and sold $22.4 billion to buyers in the secondary market. And of the $68.7 billion originated 62% were fixed-rate loans, 16% were adjustable-rate loans and the remaining 22% were balloon or hybrid loans. During the similar period in 2013, credit unions originated $98.1 billion and sold $47.2 billion. Of those loans originated 78% were fixed-rate due to the record low interest-rate environment at the time.

First mortgage credit quality improved significantly over the last year as measured by delinquency rates falling from 1.28% in the third quarter of last year to 0.96% today. Moreover, first mortgage charge offs fell from 0.20% to 0.11%, although this is still greater than the 0.02% reported in 2006. Improving credit quality will encourage credit unions to loosen their underwriting standards as well as hold more of the loans originated on the balance sheet.

Home equity loan balances rose 0.5% in November, a significant turnaround compared to the 0.5% decline reported in November 2013. Home equity loan balances are up 9% during the past 12 months due to a 5% rise in home prices, the improving job market, rising consumer confidence, consumers releasing pent up demand for durable goods, and lower interest rates. Second mortgage loan balances, however, declined 2.9% during the last year as repayments, prepayments and chargeoffs exceeded new loan originations. Members continue to roll their second mortgage balances into their refinanced first mortgage as they take advantage of these low mortgage interest rates.

Surplus Funds (Cash + Investments)

Credit union surplus funds fell 1.4% in November, or $5.4 billion, in order to fund a 0.6% increase in loan balances, $4.3 billion and to meet member deposit withdrawals of $1.3 billion. Surplus funds as a percent of assets now stand at 32.6%, down from 36.1% in November 2013. This shift in the mix of credit union assets from low-yield investments to higher-yielding loans contributed to the increase in credit union asset yields over the last year.

The composition of surplus funds for the average credit union is 24% cash (cash on hand, deposits at corporate credit union or deposits in other financial institutions) 51% in investments of federal agency securities (obligations of Fannie Mae and Freddie Mac) 12% in CDs at commercial banks and S&Ls, 3% in obligations of U.S. government securities and the remaining 10% in other investments. The Great Recession and the associated corporate credit union goings-on caused a tectonic shift in the composition of surplus funds. In 2007, credit unions held approximately 33% of their surplus funds in shares/deposits at corporate credit unions. Today, only 5.6% of cash and investments are held at corporate CUs.

Savings and Assets


Credit union savings balances fell 0.1% in November, as the excess funds that were deposited in October, due to the month ending on a payroll Friday, were used for monthly expense payments in November. U.S. personal income rose 0.4% in November and is up 4.2% during the last 12 months. With personal spending up a strong 0.6% in November, the national savings rate fell to 4.4%, the lowest rate this year. During the last 12 months, credit union savings balances rose only 4.2%, below the 10-year average growth rate of 5.5%. Year-over-year asset growth of 5.2% is outpacing savings growth due to borrowings rising 16.2% and capital rising 10.2%.

Capital and Other Key Measures

Credit union capital grew 0.7% in November, pushing the credit union average capital-to-asset ratio over 10.8%, creating fortress like balance sheets for many credit unions. During the last 12 months, credit union capital grew 10.2%, the fastest pace since April 2003. The growth rate of capital is also known as the return-on-capital ratio, a key indicator of financial performance. Expect earnings performance to improve in 2015, pushing the capital ratio over 11.3%.

Credit union loan quality indicators are now back to pre-recession levels. The CU loan delinquency rate (loans two or more months delinquent as a percent of total loans outstanding) fell to 0.77% in November, from 1.03% in November 2013 and approximately equal to the 2007 average delinquency rate of 0.76%. Better credit quality numbers are encouraging credit unions and banks alike to loosen their loan underwriting standards and increase their loan volumes. 

Credit Unions and Members

As of November 2014, CUNA estimates 6,543 credit unions were in operation, 42 fewer than October. Using a 3-month moving average to smooth out large month-to-month volatility shows an average loss of 37 credit unions per month. Credit unions cease to exist for a number of reasons – merger, purchase and assumption, or liquidation. The vast majority cease to exist as the result of a merger with another credit union. NCUA data shows 182 credit unions merged during the first 9 months of 2014, down slightly from 195 mergers during the similar time period in 2013. Year-to-date, the number of credit unions fell 252, slightly above the 242 credit union decline reported in 2013.

Credit unions added another 303,000 memberships in November, bringing the year-to-date increase up to 3.6 million members. Credit unions were attracting members at a record pace during the first 11 months of 2014, averaging over 325,000 new memberships per month. In percentage terms, credit union memberships rose 0.3% in November, 3.6% year-to-date and 3.9% during the last year, the fastest annual pace since June 2003.


There is a confluence of factors bringing about this membership surge: robust job growth, strong new auto sales, aggressive credit union auto pricing relative to banks, an increase in credit demand by the general public and relatively tight bank loan underwriting standards. Credit union membership growth is positively correlated with U.S. job growth and in November, the U.S. economy added 353,000 jobs, exceeding most economists’ expectations. With job gains expected to remain robust in 2015, credit unions can expect another year of strong membership growth.

If you would like a PDF copy of the full report, please email Jess.Noelck@cunamutual.com

January 14, 2015

Are you ready? Get your TILA/RESPA game on!

CUNA Mutual Group is helping credit unions comply with the Consumer Financial Protection Bureau’s TILA/RESPA Integrated Disclosure Rule by offering a free webinar.

Registration Details:


Title: “TILA/RESPA: More Than Just the Loan Estimate and Closing Disclosure”
Date: Tuesday, Jan. 20
When: Multiple sessions offered throughout the day
Who: Free for all credit unions
Link to register: www.cunamutual.com/tilarespa

Why you should attend:


“The TILA/RESPA Integrated Disclosure rule will completely overhaul the way credit unions go about mortgage lending and will likely impact the types of mortgage lending credit unions engage in,” said Maureen Clark, assistant regulatory compliance manager for CUNA Mutual Group. “CUNA Mutual Group is here to help credit unions prepare for the impacts this new rule will have on their closed-end real estate lending business.”

In addition to the Loan Estimate and Closing Disclosure, TILA/RESPA requires two new documents: the Escrow Cancellation Notice and the Settlement Service Providers List, which will both be discussed in detail for scope and purpose during the webinar.

“Not only are the TILA/RESPA disclosures new, it is crucial to have a plan in place for the crossover period from the current disclosures to the new TILA/RESPA Integrated Disclosures,” Clark said. “Once the rule comes into effect on Aug. 1, NCUA examiners will be focused on compliance with the new requirements.”

The Consumer Financial Protection Bureau (CFPB) issued the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) Rule in November 2013 to simplify and improve disclosures consumers receive when applying for and closing on mortgage loans. The disclosures under TILA and RESPA currently provided at the time of application and closing have been integrated and the new disclosures will need to be provided to credit union members for mortgage applications received on or after Aug. 1. The TILA/RESPA rule becomes effective and must be complied with on Aug. 1. 

Register for the free TILA/RESPA Webinar


January 13, 2015

Q&A with lending and compliance leader -- A lifetime of insight

Bill Klewin retired from CUNA Mutual Group on Friday, January 9. Recently, Bill sat down with Frank Diekmann, Cooperator-in-Chief at CUToday, and elaborated on his 28 years with CUNA Mutual, most recently as our lending product compliance leader, on lending, compliance and what's ahead. 

Here are the insights and knowledge that he's shared from the perspective of his life's work serving the credit union industry...

CUToday.info: Given the length of your career with CUNA Mutual, what strikes you most as you approach the last day on the job in contrast to what you encountered on your first day walking in the door?   


Klewin: The sophistication of the issues and the complexity of the credit union business is the greatest change. When I first started at CUNA Mutual, a large credit union was one greater than $10 million in assets. That meant that the kinds of products and services offered by credit unions weren’t anywhere near as diverse, sophisticated, or complicated as they are now. Few credit unions had first mortgage programs, and only a brave few had home equity lines of credit. Share drafts were relatively new products and still controversial in some leaders’ opinions. Most credit unions had only one or two branches and dealt with walk-in traffic, the phone, and the U.S. Postal Service as means of communications.   
From a consumer regulatory compliance standpoint, while the credit unions were subject to the rules, compliance was viewed in many circles as a nuisance. I remember one specific situation where a board actually voted that they didn’t need to comply with consumer regulations as they were “not necessary” to protect their members. 
CUToday.info: You have held a number of roles while at CUNA Mutual, including some time in the Office of General Counsel. Can you speak to the issue of some of the risks or vulnerabilities that you have seen?
Klewin: In credit unions, the biggest risk I see involves fair lending issues, both from the Equal Credit Opportunity Act and the Fair Housing Act. The ramifications of even an allegation of violations of fair lending laws can be existential. While the rules are slightly different, their purpose is similar. Their purpose is to promote the availability of credit by prohibiting discrimination in lending based on certain characteristics, such as race, gender, or marital status. Imagine the headline in your local paper-“The ABC Credit Union has been accused of discriminating against their members in their lending programs on a prohibited basis.” A credit union may not be able to survive such an allegation, let alone a determination it actually did discriminate on a prohibited basis.) 
I discuss the “disparate impact” test below and difficulties it creates in compliance.  Unfortunately, you don’t need to go so far as a “disparate impact” test case to find real problems in credit unions in fair lending.  For example, I am always concerned about and have written and taught extensively what I refer to as “happy talk” from credit union staff. 
“Happy talk” is the non-business related talk staff engages in with potential borrowers. It may appear as innocuous as a question about when two borrowers are getting married or when a pregnant woman is expecting her baby. Seems like chit-chat, but when that chit-chat is coupled with a denial of a loan, it can take on much more sinister overtones.  Imagine being sued for discrimination in denial of a loan based on child-bearing (a prohibited basis) and having your loan officer asked on the witness stand whether they asked the borrower about her baby.
The loan officer will have to testify he did ask the question, but it had nothing to do with the loan decision. Even if the jury decides it wasn’t used in determining the woman’s creditworthiness, the taint on the credit union’s reputation and the risk of future liability remains. 

These kinds of small interactions could have outsized ramifications, even to the continuing existence of the credit union. Fair lending, from a compliance standpoint, is THE “keep-me-awake-at-night” risk. A credit union can’t quantify it very well, and it can’t totally mitigate the risk at all. It’s a Sword of Damocles over their head.

CUToday.info: You have spent a considerable amount of time in credit union lending. How has that evolved from both the CU standpoint and the solutions that CUNA Mutual has sought to provide?  
Klewin: The biggest change has been the level of sophistication a credit union lender must have about so many issues in being a successful lender. In the past, a lender had a limited number of products available and a limited number of distribution channels for her products. 
For example, a lender back then may only have made auto secured loans and personal loans out of one branch office. In that case, she could focus on minutiae of underwriting and, if a loan was granted, completing the paperwork appropriately.  
As an aside, I saw many loan and deposit documents that were completed by hand, and used rate charts in determining the numerical disclosures.   For those who don’t remember, a rate chart was a pre-calculated chart that showed the loan officer what payments should be, given certain interest rate and loan term assumptions. After a factor was found, simple math was used to calculate the remainder of the disclosures.  Needless to say, there were many errors in such a manual approach. It led to what I referred to as the “Friday afternoon-Monday morning syndrome.” There was a demonstrable uptick in errors on Friday afternoons due to higher volume and on Monday morning due to, well, it being Monday morning. 
CUNA Mutual, from the very beginning of the technology revolution made solutions available as I note below. In the case of loan calculations, CUNA Mutual began with a device called “Loan Star” to help with these calculations and continues today to support a calculation engine used in many data processing systems. Now, a lender has a full array of products, credit cards, home equity lines of credit, first mortgages, business loans, heck, loans secured by ocean-going boats; you name it, likely a credit union lender needs to consider almost any type of loan. Additionally, those loans can come from multiple branches in multiple states, through the internet, the phone, mobile devices. 
The breadth, depth, and complexity of a lender’s job are the greatest challenges. CUNA Mutual has responded over the years with products and services to help credit unions with the lender’s challenge, including LOANLINER documents for almost any credit union lending need, loanliner.com, Smart Phone Loans, the Lender Development Program, and Loan Generation Marketing.  I’m proud that our products help thousands of credit unions meet their members’ needs.
CUToday.info: What have you found to be some of the lessons learned and best practices observed when it comes to the lending process? Are there certain places where some credit unions get tripped up?

Bill Klewin has recently retired from CUNA Mutual Group, well known to many following a long career that included being the primary architect behind the company’s LOANLINER solution and numerous appearances before credit union meetings. At the time of his retirement, Klewin was the lending product compliance leader. In that role he was responsible for issues involving regulatory compliance, lending and credit union operations. Klewin joined CUNA Mutual Group in 1986 as assistant counsel. After 10 years in the Legal division, he was named vice president and managing director of CUNA Mutual Group’s Lending Lab and product leader for LOANLINER and the Student Loan Network. He rejoined the Legal division in 2007 as associate general counsel.

January 8, 2015

CUNA Mutual Group Financial Strength Affirmed By A.M. Best

A.M. Best Company has affirmed the financial strength rating of CMFG Life Insurance Company (CMFG Life) and MEMBERS Life Insurance Company at “A” (Excellent). A.M. Best also affirmed the “A” (Excellent) rating for CMFG Life’s property/casualty subsidiaries: CUMIS Insurance Society, Inc. and CUMIS Specialty Insurance Company, Inc.  A.M. Best has assigned an issuer credit rating of “bbb” to CUNA Mutual Financial Group, Inc., the intermediate holding company within the group. The outlook for all ratings is stable.

Alastair Shore
Chief Financial Officer
“CUNA Mutual Group is committed to long-term growth," said Alastair Shore, executive vice president and chief financial officer for CUNA Mutual Group. "This confirmation of our financial ratings is important to us as we shape the company that will serve credit unions and members for generations to come.”

In affirming CMFG Life’s “A” rating, A.M. Best cited the company’s “position as the leading provider of insurance and financial services products to credit unions, their employees, and members, strategic changes to the organizational structure to improve capital flexibility, prudent capital management and reduction in investment risk.” Also cited was the company’s modest financial leverage with strong interest coverage.

Regarding CUNA Mutual Group’s property/casualty subsidiaries, A.M. Best recognized their favorable level of risk-adjusted capitalization, conservative balance sheet, overall operating profitability and well-established niche position in the credit union segment. Producers Agriculture Insurance Company and its 100 percent reinsured affiliate, Producers Lloyds Insurance Company both of Amarillo, Texas, which were previously rated with the property/casualty entities, were acquired by HCC Insurance Holdings, Inc. effective Jan. 1, 2015.

December 22, 2014

"Thank You for Being in My Toolbox"

Last week we told you the story of one of the 8.5 million credit union members we helped protect this year from unforeseen setbacks to payments on vital resources like cars and homes. 

To us, putting a face to what we do, to really know the members we serve, is so important to us. So much so that following her claim, we invited Helen Agnew, a member of CU Community Credit Union in Springfield, Missouri, to visit our CUNA Mutual Group headquarters in Madison, Wisconsin. She had a chance to tell her story in person and meet many of the employees who made a difference for her.
Click image to watch Helen meet the people who serviced her claim
We recognize stories like this because we know we can't exist without our customers, without the credit unions, without the members. Helen shared a similar sentiment about the work we do when she said, "it really was the safety net we needed at a time that we really didn't have any other options. If my story touches one person who can repeat it, it is worth it." We really hope Helen's story can spread and can help others' as well. 

It truly is a team effort, and we would never have been able to have this impact on Helen's life if it wasn't for the care that her credit union took when providing her the loan and debt protection to cover her in case of the unexpected. 

Carolina Decker, VP of Lending at CU Community Credit Union told us they see themselves as partners with their members. "All our products are designed to help members when they get into a pinch. They are designed to take over loan and car payments so that’s one less thing the member needs to worry about if and when something unexpected happens, like a job loss or a medical emergency."

Helen's credit union said they find the debt protection products like this and also for disability and life to be the most valuable offerings to their members from a lending perspective. Carolina said they recommended Helen sign up for the unemployment insurance because "unexpected circumstances happen, things you can’t control, and CU Community Credit Union wants to be sure that our members successfully make it over the bumps that life throws at you. Financial stress doesn't need to further impact the stress of losing a job."

Thank you to partners like CU Community Credit Union and to members like Helen Agnew for sharing their stories -- this is our purpose!



December 17, 2014

Credit Union Trends Report: December 2014 (October 2014 data)

ECONOMIC, COMPETITIVE, AND REGULATORY ENVIRONMENT

Economic activity increased 3.9% in the third quarter, at a seasonally adjusted annual rate, and grew 2.4% year over year. Final sales, which exclude the support to GDP from inventories, rose 4.1% indicating spending momentum is building for the U.S. economy.

The economy added 243,000 jobs in October, slightly less than the 271,000 reported in September, and the unemployment rate fell to 5.8%. This signals a tightening labor market with wage growth expected to accelerate in the near future. The 25% drop in oil prices from July through October provided consumers a boost in purchasing power similar to the 29% oil price drop experienced back in 1998. By 1999, retail sales grew at an annual pace of 8.5%, twice the 4.5% reported in 2008, which indicates retail sales and credit union lending in 2015 are looking up.

Report Highlights

  • At the end of October, CUNA’s monthly estimates reported 6,585 CUs in operation, down 5 CUs from one month earlier. Year to date the number of credit unions declined by 210, below the 236 lost in the first 10 months of 2013 and also 2014.
  • Credit union savings balances rose an outsized 1.3% in October, and 4.6% year-to-date, due to the month ending on a Friday payday and falling gas expenditures. Year-over-year asset growth of 5.8% is outpacing savings growth due to borrowings rising 19.2%.
  • The nation’s CUs increased their loan portfolios 0.85% in October, 8.9% YTD and 10.3% during the past year. Member business loan balances rose 3.8% in October, the fastest growing category, followed by adjustable-rate mortgages, 2.3% and new auto loans, 2.2%.
  • Credit union memberships rose 186,000 in October to reach 101.6 million, a 0.2% increase from September, and 3.3% year to date. Year-over-year, memberships are up 3.6%, the fastest pace since July 2003. With job growth expected to be over 250,000 a month in 2015 and new car sales to reach 17 million units, membership growth will remain strong for the next 12 months.
  • Credit union capital grew 9.9% during the last 12 months indicating stronger earnings performance for many credit unions. The movement’s return-on-asset ratio rose to 0.88% in the third quarter, up four basis points from the second quarter, due to a 7 basis point increase in asset yields, a 3 basis point increase in non-interest income, a 3 basis point increase in operating expenses and a 3 basis point rise in loan loss provision expense. Credit union capital-to-asset ratio remained at 10.8%, the highest in six years.

Total Lending

Credit union loan balances rose 0.85% in October, slightly better than the 0.72% pace reported in October 2013. During the last 12 months, credit union loan balances rose 10.3%, as credit union members’ willingness and ability to borrow and spend have both rapidly improved. Consumer confidence in October rose to levels not seen since October 2007, two months before the onset of the Great Recession.

Credit union loan delinquency rates (delinquent loans as a percent of total loans) fell to 0.74% in October, the lowest rate since August 2007. There is a strong correlation between credit union loan delinquency rates and the nation’s unemployment rate. During the last 12 months, the unemployment rate fell 1.5 percentage points, from 7.3% to 5.8%, while the delinquency rate fell 0.25 percentage points, from 1.01 to 0.74%. The dramatic improvement in both metrics is encouraging lenders to loosen their loan underwriting standards.

Credit Union Consumer Installment Credit (CUCIC)

Credit unions’ consumer installment credit balances rose 0.85% in October, or $2.5 billion, above the 0.5% reported in October 2013. Rising debt levels coincided with a modest 0.3% growth in total retail sales. Retail sales were depressed because of falling gasoline prices. But retail sales excluding gasoline stations rose a healthy 0.5%, indicating consumers did spend some of the money saved at gasoline stations. During the last 12 months, credit union consumer installment credit balances rose a healthy 12.3%. The last time credit unions reported annual growth over 12% was back in 1995. Credit card balances were unchanged in October signaling members are still wary of taking on higher-rate debt, and are using their credit cards for payment convenience by paying off new charges.

Vehicle Loans

Credit union auto lending continued to surge in October with new auto loan balances rising 2.2%, above the 1.6% reported in October 2013. This is the fourth month out of the last 5 that monthly new auto loan growth exceeded 2%. During the last 12 months, credit union new auto loan balances rose 20.5%, the fastest pace since August 1995. Vehicle sales (cars and light trucks) rose to a 16.5 million seasonally adjusted annual rate in October. Auto sales are currently growing at the fastest pace since 2006, the year home prices peaked.

Vehicle sales were boosted by increasing household wealth, lower gasoline prices, an improving labor market, new models, and better access to credit for borrowers with less than a prime credit history. The sales of expensive cars, those priced over $50,000, have surged by over 30% in the last year and will reach over 1 million units sold in 2014.

Meanwhile the sales of cars priced less than $50,000 are up 4.1% during the last year. Vehicle sales are expected to remain above 16 million units through 2017 as pent up demand is satiated and the economy produces around 3.4 million jobs annually.

Real Estate-Secured Lending – 1st Mortgages and Other Real Estate

Adjustable-rate first mortgage loan balances rose a robust 2.3% in October, the second fastest growing loan category for the month, and were up 15.4% year-over-year. Fixed-rate first mortgage balances fell -1.2% in October, but are up 5.3% during the last year. Existing home sales rose 1.5% in October, but are up only 2.5% during the last 12 months. The existing median home price reached $208,300 in October, up 5.5% since October 2013. Refinancings remain tame and are near a 6-year low given that mortgage rates have been so low for so long. Most homeowners who were willing and able to refinance have already done so.

Low interest rates, improving consumer confidence and rising home prices pushed home equity loan balances up 1.4% in October, significantly better than the -0.3% reported in October 2013. During the last year, home equity balances rose 7.8%, the fastest pace since August 2009. Credit unions’ interest rates on home equity lines of credit average 4.11% in October, according to Informa Research Services, 26 basis points lower than the bank average. Second mortgage loan balances also rose in October, increasing 1.1%, as the first mortgage refinance business dried up and fewer second mortgages were rolled into refinanced first mortgages.

Home prices rose 0.5% in October and are up 6.1% during the last 12 months, according to the Core Logic Home Price Index. However, prices are still 12% below their peak set back in April 2006. The home appreciation rate is expected to taper off to 5% in 2015 due to an increasing supply of homes. Rising home prices will increase household wealth and maintain the upward momentum of the Consumer Confidence Index. Both will encourage consumers to lower their savings rate and increasing spending on consumer durables in 2015.

Mortgage credit is still constrained because of new regulations, but is slowly easing as policymakers work to bring down some regulatory impediments. The Federal Housing Finance Administration, FHFA, announced plans in October to reintroduce mortgages with down payments as low as 3% through Fannie Mae and Freddie Mac. This should increase access to mortgage credit, which in turn boosts homeownership with low-to-moderate income and first time homebuyers.

Surplus Funds (Cash + Investments)

Credit union surplus funds rose 2.4% in October, or $9.0 billion, due to a large $13 billion surge in savings deposits. Savings balance growth has averaged a little over 3 billion each month. So approximately $10 billion of the $13 billion surge in savings balances was due to the month of October ending on a payroll Friday. Credit unions therefore placed the lion’s share of these new deposits into short-term investments with the expectation of abnormally large deposit withdrawals in the month ahead.

During the first nine months of 2014, the yield on surplus funds rose to 1.21%, up from 1.10% reported during 2013. The gain was a consequence of credit unions shifting investments into longer maturity investments. Surplus funds with a maturity less than one year fell from 42.5% in 2013 to 39.8% today. Meanwhile, investments with 1-3 years maturity rose from 23.9% of surplus funds in 2013 to 26.4% in 2013. Investments with even longer maturities rose from 21.2% to 23.6% of surplus funds. This is a signal credit unions believe the Federal Reserve will keep rates lower for longer.

Savings and Assets

Credit union savings balances rose an outsized 1.3% in October, and 4.6% year-to-date, due to the month ending on a Friday payday and falling gasoline prices reducing gas expenditures. This pushed year-over-year savings balances growth to 5.0%. Total credit union savings balances now stand at $972 billion, or 5.5% of nominal gross domestic product. In other words, credit union members’ savings deposits equal approximately 20 days of annual national income, up from 16.4 days set back in 2007, just before the onset of the Great Recession. Year-over-year asset growth of 5.8% is outpacing savings growth due to borrowings rising 19.2% and capital rising 9.9%.

Capital and Other Key Measures

Credit union capital grew 9.9% during the 12 months ending in October, while the 3-month moving average rose to 10.1%, the fastest year-over-year pace since June 2003, see figure 6. Net income is the income statement flow account that allows the balance sheet capital account to increase. Net income as a percent of assets came in at a relatively strong 0.88% in the third quarter, above the 0.69% reported in the third quarter of 2013 and above the 0.83% reported in the second quarter of 2014. Rising net interest margins during the last year boosted credit union return on assets.

Credit Unions and Members

As of October 2014, CUNA estimates 6,585 credit unions were in operation, five fewer than September. Using a 3-month moving average to smooth out large month-to-month volatility shows an average loss of 24 credit unions per month.

This is slightly more than one credit union per business day being merged into another credit. Year-to-date, the number of credit unions fell 210, slightly below the 236 credit union decline reported in both 2013 and 2014. During the past 12 months, the number of credit unions fell 249, compared to the loss of 281 credit unions in 2013.

Strong job creation in October helped propel credit union membership gains to 186,000. Total memberships reached 101.6 million, a 3.6% increase over the last year. This is the fastest membership growth rate since July 2003. Memberships rose 0.2% in October, faster than the zero growth reported in October 2013, and 3.3% year-to-date.

U.S. job growth and credit union membership growth is highly correlated. In October, the U.S. added 243,000 jobs, down from 271,000 reported in September, but above the previous 3-month moving average of 239,000. The types of jobs created were well-diversified across many sectors: lower-paying retail jobs, middle-income manufacturing and construction jobs, and higher-paying professional and healthcare jobs. In 2015, job growth is expected to accelerate to over 300,000 net new jobs per month. This will underpin continued strong credit union membership growth next year. The labor market tightened in October as the unemployment rate fell to 5.8% from 5.9% in September. Expect wage gains to accelerate in earnest in 2015 as the unemployment rate approaches its long-run natural rate of 5.5%.

If you would like a PDF copy of the full report, please email Jess.Noelck@cunamutual.com

December 16, 2014

2014: Our Year Measured in Customer Impact

As we look back over the past year, our purpose is clear. We exist to help people build a better financial future, and we do this by focusing on our customers and living our commitment to doing business with integrity.

We measure how well we've performed and lived up to our purpose in ways--big and small--that we have impacted our customers.

The cumulative impact of our products and services on those we work hard for all year is impressive and means a great deal to us, but hearing individual stories of those we have helped means even more.

DEBT PROTECTION

We have protected more than $260 million in credit union member loans, enabling 8.5 million members to keep their homes and cars if unforeseen setbacks were to come.

Helen Agnew is one of those 8.5 million and her story is our purpose. A member of CU Community Credit Union in Springfield Missouri, Helen tells us how the credit union offered our debt protection product on a loan that ultimately made all the difference in keeping her and her daughter on their feet when she became unemployed. (Click image to watch.)

TRUSTAGE INSURANCE

This year, we launched 3 new insurance products: Whole Life, Children's Whole Life and Health. We also optimized our Life claims handling process for beneficiaries, with 25% of claims now paid on the initial call. There are now more than 15 million credit union members protected through our TruStage insurance.

Belinda Lockridge is just one of those members but her story is our purpose. She is representative of the millions of underinsured Americans we serve to build financial security for their families. (Click image to watch.)

RETIREMENT SERVICES

As a provider of retirement plans for credit unions and small businesses, we strive to include educational features that will improve the organizations’ participation rates in the programs. 

More than 45,000 credit union and small business employees now track their progress toward retirement and are able to easily make adjustments through our online planning tool. 

Nathan Grossenbach of Shoreline Credit Union in Two Rivers, WI tells the story of how we exceeded their expectations with the transition to a new 401(k) plan and helped their employees understand the plan and how they would benefit from participating. His story is our purpose. (Click image to watch.)

 BUSINESS PROTECTION

This year with our business protection solutions and risk management resources, we  paid $64.7 million in claims (through Q3) and sent alerts to 24,000 credit union employees, helping them mitigate and overcome risks. We also visited nearly 1,000 credit union sites to assess risks and provide strategic consultation. 

Unfortunately, Augusta VAH Federal Credit Union experienced a devastating fire to its main branch in 2011.CEO Phyllis Cochran's story--of how our teams helped her CU recover--is our purpose(Click image to watch.)

CUNA MUTUAL GROUP'S WEALTH MANAGEMENT

CUNA Mutual Group's Wealth Management helps consumers achieve a more secure financial position by helping them save for and realize their lifetime dreams, whether that’s their child’s education, a dignified retirement, or simply financial peace of mind. We’re doing this by providing unique, simple-to-use, high-value service and product solutions to consumers through financial advisors.

This past year, we paid credit unions more than $65 million in fee revenue.

David Young, EVP at Commonwealth Credit Union in Frankfort, Kentucky, shares why they partner with CBSI to enhance their investment services and deepen member relationships. His story is our purpose. (Click image to watch.)

In 2015, our focus on our purpose -- helping people build a better financial future -- will be stronger than ever. We'll continue investing in our capacities and optimizing our products and processes to better serve our credit union customers and their members. We will build on our strengths and accelerate our growth for the healthy future of the credit union industry. Our customers are our purpose.

Watch for more updates in the coming weeks on these stories and where we are headed in 2015.


December 10, 2014

28 Years Later: Bill Klewin Retires, Still Energized by Credit Unions' Passion

Bill Klewin, director of regulatory compliance for CUNA Mutual Group, is retiring after 28 years with CUNA Mutual Group. Andrea Stritzke, formally with PolicyWorks in Des Moines, Iowa, will be filling his position at the company in January.

Bill Klewin
Director of Regulatory Compliance
“Bill will be missed, not only as a long-term and dedicated employee, but as a nationally recognized consumer lending expert and valued industry resource for credit unions,” said Kathy Blumenfeld, vice president, CUNA Mutual Group Lending and Payment Security. “The expertise he brought to the position through his many industry speaking engagements and relationships is difficult to replace. But we are thrilled to have Andrea step in and build on what Bill has established. Andrea is uniquely qualified to step into this position without missing a beat.”

Klewin joined CUNA Mutual Group in 1986 as associate legal counsel and has held numerous leadership positions, including his most recent role as director of regulatory compliance for the company’s Lending and Payment Security business. Klewin made his mark on credit union lending with creative solutions, fresh ideas and LOANLINER® product designs. Throughout the last several years, Klewin led the company’s lending products through a highly active regulatory environment. He built a strong team of compliance experts and readied them to successfully handle ongoing regulatory changes.
“I’ve been helping credit unions with their lending, operations and regulatory compliance for 28 years. The most rewarding part of my job was exchanging insights with our customers. I will miss their questions and comments, their camaraderie and their passion about what we do. Most of all, I will miss the feeling of satisfaction when I have helped someone at a credit union solve a particularly troublesome problem. Thank you to everyone with whom I’ve worked."

Andrea Stritzke
Stritzke joins CUNA Mutual Group from PolicyWorks in Des Moines, Iowa, where she served as vice president of regulatory compliance, and was responsible for the delivery of PolicyWorks’ regulatory services and new product development while providing credit unions consultation and training on various regulatory matters. In addition, Stritzke assisted credit unions with strategic compliance program management, and is a nationally recognized speaker on lending and deposit compliance issues.

November 5, 2014

Prepare today for looming TILA/RESPA changes



by Jon Bundy, CUNA Mutual Group's Regulatory Compliance Manager

The Consumer Financial Protection Bureau (CFPB)’s TILA/RESPA Integrated Disclosure Rule is the largest mortgage lending regulatory compliance change seen by credit unions in recent times. Specifically, the rule will impact credit unions’ relationships with their system, document, and service providers, and, most importantly, their members and credit union staff.

Credit unions must act now to prepare for the combined disclosure rule stemming from the Dodd-Frank Act’s changes to the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA).

The new disclosures are not merely replacing or combining the existing disclosures. The regulations require loan disclosures to change dynamically to reflect each borrower’s unique loan features, which means the new documents will have new data elements, calculations, and restrictions, and incorporate dynamic elements based on loan type, loan feature, and loan purpose.

Taking everything into consideration, there could be thousands of permutations of the new disclosures because of the dynamic nature of the documents.

To be fully prepared, credit unions must:

  • Start making and documenting business decisions regarding the type of lending programs offered and fees and services charged.
  • Update systems with new data fields and calculations and work with system and document providers to make sure they are on track.
  • Establish procedures to guarantee service providers and settlement agents are walking in step with your credit union to address restrictions and timing limitations.
  • Make sure document providers get your new disclosures to you in time to test and train.
  • Determine who is in charge--know your compliance resources.
  • Know how each department will be impacted and how third-party partners can help.

The compliance deadline is looming--the TILA/RESPA rule becomes effective and must be complied with on Aug. 1, 2015. Don’t get caught unprepared, start having these discussions today.

Jon Bundy is compliance manager of service products for CUNA Mutual Group, responsible for the development of lending and deposit products and assisting credit union leaders with maintaining regulatory compliance through their policies and procedures.


November 4, 2014

CUNA Lending Council Crashers lay down some straight talk...




We caught up with a couple of CUNA Lending Council Crashers for some straight talk about what drives their generation to chose one financial institution over another.

We asked...

  • What are financial institutions missing that would otherwise make them more attractive to you and your millennial peers? 
  • What do you or your peers care most about at your financial institution of choice?
  • How can credit unions adapt to make themselves more appealing to younger generations today and with generations to come?

They told us straight...

The answers we heard confirm what we've always known on one level, but also remind us not to forget about the real and human elements that are, and always have been at the center of the credit union idea. 

Julia Boldina, Operations Manager, NYC Federal CU

Keep up with technologies at other FIs
Embrace Apple Pay
Gen Yers still want to talk F2F with someone




Renee Mullins, Lending Consultant, Call Federal CU

Convenient technology matters
Social media connection matters
Local businesses supporting local economy and giving back matters



Amanda Kissner, Loan Officer, Wakota Federal CU

Technology and easy processes 
Focus on the values of the cooperative movement
Stay local and team up with other like-minded businesses


Credit unions--what I'm hearing is that this is our game to lose. Younger generations may want the best of both worlds when it comes to fast, convenient technology and local, socially responsible practices, but that's good news to a business that can offer both.

Learn more about the CUNA Lending Council Crashers.
Learn more about Filene's The Cooperative Trust and Crasher Program.

November 3, 2014

4 credit unions' excellent lending programs highlighted at CUNA Lending Council luncheon



We celebrate the credit union industry's Consumer and Business Lending excellence through these 4 shining examples.

Winning CUNA Mutual Group's and CUNA Lending Council's Excellence in Lending Awards at the CUNA Lending Council's 20th annual conference are:

Carter Federal Credit Union
Shreveport, La.
$230,000+ million in assets; 30,000+ members
Consumer Lending, Less than $250M in Assets
Why they won: Significantly grew more profitable direct lending program while maintaining a moderate indirect lending channel. Click image to view short video about their program.

Clearview Federal Credit Union
Moon Township, Penn.
$900 million in assets; 86,000 members
Consumer Lending, More than $250M in Assets
Why they won: Revamped home equity products that are flexible and priced more competitively. Click image to view short video about their program.

Numerica Credit Union
Spokane Valley, Wash.
$1.3 billion+ in assets; 103,000+ members
Business Lending
Why they won: Hired experienced commercial loan officers and credit personnel; purchased software to set for more home-grown business lending. Click image to view short video about their program.

Highmark FCU 
Rapid City, S.D.
$95 million+ in assets; 9,500+ members
Business Lending
Why they won: Investing in employees and technology, as well as adding a personal touch to its focus on small businesses and ag producers. Click image to view short video about their program.

Full News Release here

September 23, 2014

Loan Growth for CUs Best Since 2006

We've been on quite the upward trend with the monthly "Credit Union Trends Report" from our chief economist, Steve Rick. In fact, according to recent numbers, the credit union industry has seen a 10.2% increase in loan balances in the past year alone - that's the highest levels since February of 2006.


Rick points out a few other things in this month's report:

1. Vehicle lending was "red hot" this summer. So hot that "overall credit union loan growth is more affected by used auto loan growth than new auto loan growth."


2. Pressure point, secured lending. First mortgages were down 33% in the 2nd quarter this year compared to the same quarter in 2013. Rick says, "this has lowered non-interest income and put downward pressure on credit unions' bottom line." 

3. Membership boom continues! CU membership is up 2.1 million year-to-date. According to Rick, that's a 17% faster pace compared to the similar period in 2013. Rick says "membership growth is highly correlated to asset size." 

Want to hear more from Steve Rick? Check out our short CU Trends video overview



September 18, 2014

#DiscoveryCon - what to expect?

The Discovery Conference - it's this mix of the benefits of going to a huge credit union industry conference with piles of content, networking, live chats - all online and all without the need to iron anything. Heck, you don't even have to wear shoes!

Our jobs allow us get a sneak peak at the content and sit in on the presentation recordings. And we wanted to share a few things that we've already learned even before the show starts on Oct. 15!


Disruptive Economy - disruption has been happening in many other industries. Our SVP of Strategy & Business Development, John Lass shows us what has happened to industries/companies ready or not for the disruptive waves.

Click photo for "Disruptive" teaser video 












Social Media & Compliance - Co-founder of Chatter Yak!, Bryce Roth, pinpoints the social media responsibilities of credit unions. Hint: disclaimers on Facebook

Roth w/ importance of FFIEC rules














Mobile Trends & Auto Purchasing - "The majority of auto buyers now research their options online and on smartphones." says Steve Hoke, director of loan growth for CUNA Mutual Group. He hits the mobile trends and data points CUs should know.

Hoke goes mobile














There are 10 other presentation sessions that we don't have room to cover on this blog. So, check out the details of Discovery Online and over on Facebook - see you Oct. 15!

September 5, 2014

The Mobile Mindset

How important is offering mobile access to customers to the financial industry today? New smartphone lending data from CUNA Mutual Group answers that question:
  • 63% of adult smartphone owners use phones to go online.
  • 34% of those do online searches on their phones rather than a computer.
More to the point, mobile website optimization for smartphones/tablets are key business practices to ensure financial institutions don't miss any demographic segment (boomers, millennials, everyone).  For instance, the "Consumers Want Better Mobile Banking" study discovered this stat:
  • 1 in 6 millennials say poor mobile experience will cause them to find a new financial provider.
Here's the thing: mobile-optimized sites allow smartphone/tablet users to show and compare products easily, whenever and wherever they want. Major purchases, such as buying a new car, are happening on mobile devices. I give you this stat from "Mobile Device Use at the Dealership:"
  • 63% of auto shoppers researched & shopped on their mobile device while at the dealership.
Even inside our own building, we are watching dramatic increases in mobile lending trends. Just look at the graphic below!



Watching mobile trends is part of my job, and I've been talking to credit unions across the country saying if they don't innovate through mobile offerings, they're likely to lose out with existing and potential new members who may go elsewhere. I suggest you visit your credit union's website on your phone and think about how good or iffy the experience is for you - because that's what your members are looking at these days. 

Guest blog post by: Steve Hoke - he's the director, loan growth products at CUNA Mutual Group. Want to know about mobile trends? Ask this guy. 

August 20, 2014

CUNA Mutual Group Recognized as CIO 100 Award Winner for the ZONE

International Data Group's CIO magazine named CUNA Mutual Group among its 2014 CIO 100 award recipients. The 27th annual awards program was held Tuesday evening, Aug. 19, and recognizes organizations worldwide that exemplify the highest level of operational and strategic excellence in information technology.

CUNA Mutual Group's CIO, Rick Roy, was honored with accepting the award.
The Award Winning Project:
  • The ZONE:
    • A tablet application that helps credit union members plan for retirement security. 
    • Launched in August 2013, the ZONE presents CUNA Mutual Group’s registered index annuity, MEMBERS® Zone Annuity, in a unique, high-performance web application for the iPad. 
    • The ZONE helps advisors and credit union members work together to create a zone of risk and reward aligned with the member’s investment goals.
"For 27 years now, the CIO 100 awards have honored the innovative use of technology to deliver genuine business value," said Maryfran Johnson, Editor in Chief of CIO magazine & Events. "Our 2014 winners are an outstanding example of the transformative power of IT to drive everything from revenue growth to competitive advantage."

August 6, 2014

Crash the CU Water Cooler

The big credit union industry events, like GAC and ACUC have been crashed for the past few years by members of The Cooperative Trust. CUNA Mutual Group has been thrilled to be part of this new wave and new generation of industry leaders to help bring new life to the credit union and cooperative movement.

2014 Crash the GAC
2012 ACUC Crash - San Diego













Point is, it's time to change things up a bit.

We've teamed up with the Crashers again to spread this program to other industry events around the country and bring in even more opportunities for Crashers to attend. Our first stop - the CU Water Cooler Symposium in Austin, TX coming up in September!    

What do you need to know? Application deadline is Friday, August 8! All the other info, check the video below.



Stay tuned for other event announcements as the year moves on - until then Crashers, we'll see you in Austin! 

July 22, 2014

100 Million Members - Now What?

Each month we look at the latest Credit Union Trends Report for the information our credit union followers need/want to know. Typically, it's loan trends (auto, home, refinancing) and membership growth.

This month in our interview with our new chief economist, Steve Rick, we had a chance to talk about hitting the 100 million member milestone. While we expect to hit the mark sometime this summer, Rick pointed out that "credit union membership is growing 25-percent faster than this time last year." Of course, we had to ask why? He attributes the rapid growth to a few things:

  • General increase in credit demand in the over all economy.
  • Labor market is improving.
  • People are ready to make bigger purchases (cars, appliances...).  
And with these new members comes important marketing opportunities through, not only direct marketing, but membership-relation-focused-marketing, social media, mobile marketing and on and on and on.  

The question is, we have 100 million members (and counting) waiting to be served, now what are we going to do to with them? 

   

July 3, 2014

The Cost of a Data Breach

According to a Ponemon Institute report, the average total cost of a data breach is $3.5 million. And that breaks down to $145 for each lost or stolen record containing sensitive and/or confidential information!

There was a lot of chatter at ACUC about Jay Isaacson's presentation about "Cyber and Data Security Losses." He talked about the "significant dollar losses and reputational damage done to companies.

According to the 2014 Verizon Data Breach Investigation Report, there were 1,367 data breaches in 2013 - 465 of those were in the financial industry. Isaacson said, "Network security is only as strong at the weakest link."

He asks credit unions to try and answer these questions when it comes to responding to a cyber-attack:
  • Does your credit union have an Incident/Breach Response Plan?
  • Does your credit union regularly review the controls and security of 3rd parties housing your data?
  • Does your credit union have mechanisms in place to detect and react to potential Denial of Service (DDoS) attacks?"
The question is, what's the first thing you'd do if you found out there had been a data breach at your credit union?



July 2, 2014

Credit Unions Facing a "Perfect Storm"

Unlike banks, credit union executives are limited on how much they can contribute and receive from retirement plans.

CUNA Mutual Group's Bruce Bauer (senior executive benefits specialist) spoke about this controversial subject at ACUC saying credit unions are facing a "perfect storm" when it comes to recruiting, retaining and compensating executive talent. "Jobs are opening up, executive talent is being aggressively wooed away from credit unions." 

Think of these numbers:

  • Nearly 50% of U.S. employers are challenged to fill mission-critical positions.
  • 63% of organizations say other companies are trying to recruit their leadership.
















What can be done to help keep your excellent executive at your credit union? Bauer has a four-word answer: Supplemental Executive Retirement Program (SERP). "Regulatory provisions allow credit unions to fund SERPs through formerly impermissible assets." 

When developing executive compensation plans, Bauer recommends three things for credit unions:
  1. Align compensation philosophy with their mission, organizational and financial goals.
  2. Encourage leadership continuity by defining a scope that addresses the CEO and key executives.
  3. Use peer compensation data to establish desired competitiveness levels.
What are your credit unions plans for keeping your executives?

Learn more about SERP here

July 1, 2014

Time to get real: Mobile platforms aren't 'nice to have'

Have you recently applied for a loan from your credit union through the same channels your members do? How was the experience?

"If a credit union wants to be a full-service provider in their member's delivery channel of choice, you need to have a mobile first mindset across the entire business – or your CU will lose out in the end,”  CUNA Mutual Group's Robert Israelite emphasizes during his Discovery session Tuesday at America's Credit Union Conference.

Perhaps hard to hear, Israelite brings to light the reality that many veteran CEOs and credit union boards are far removed from the behaviors and needs of their members. In fact, according to Google's "Think Insights" study, if your website is not mobile-optimized: 













The old 'nice to have' is the new 'need to have.' Israelite recommends credit unions looking to build out their mobile capabilities take a deep breath and:

  • Start with your mission, vision and values --  determine if your goals and strategy relate to mobile and if so, build it into your business strategy at the very top.
  • Put yourself in the shoes of a real member -- make it a priority for all your staff to experience and understand every online member-facing channel. 
  • Go through every link on your site -- if you don’t control it talk to business partners who do to get it optimized for mobile. 
Essentially, the key here is to understand what your members are experiencing. And, Israelite adds, "you'd better get moving because you're already late to the party. Many credit unions have already lost more members than they’ll ever know about. Those members have moved on and they’ll never come back."

Like what he has to say?
Listen to a radio podcast with Israelite for more in-depth info.