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Growth Strategies: River Town FCU Loan Manager Shares Four Ways to Grow Your Loan Portfolio
Wednesday, April 16, 2014 6:55 AM

Feeling more confident, consumers seem to be loosening their purse strings and borrowing more. Consumer borrowing climbed $16.5 billion in February, up from a $13.5 billion gain in January, according to the Federal Reserve. And the $18.9 billion increase in borrowing in the category that covers autos and student loans was reportedly the biggest one-month gain since February 2013. Credit unions like River Town FCU in Fort Smith Ark. are seizing this opportunity to capture more loans.

“Since the economic recession, consumers have felt a little uneasy about taking on more debt. But it seems they are feeling more secure in their ability to manage new debt. Since January of this year, we’ve seen steady loan growth,” says Tim Bowers, loan manager with the $14 million in assets credit union.

River Town FCU offers a number of lending products, including credit cards, signature loans, home equity, recreational vehicle loans, and motorcycle loans. For their mortgage lending, River Town FCU uses CU Members Mortgage – a business partner of Credit Union Resources. However, Bowers says auto loans are their “bread and butter.” The credit union engages in indirect lending through a CUSO.

“People have been driving their cars for longer because they haven’t wanted to take on new debt; however, that’s starting to change as people are biting the bullet and trading in their aged and high mileage vehicles for new or pre-owned vehicles with less mileage. As a result, we’re seeing a greater demand for auto loans,” Bower tells the Leaguer.

Bowers shares a few lending growth strategies with Leaguer readers:

  • Make sure your loan rates are competitive. “Even loyal members are rate shoppers,” he says. “Particularly your high credit score members. They’ve managed credit responsibly and they demand the best rate. If they can’t get it from you, they’ll go elsewhere.”
  • Cross sell. “We’re a small credit union with just over 3,300 members, and most of our members are health care employees, so that does work to our advantage,” he says. “We identify the needs of our membership and take advantage of opportunities to educate them on the appropriate products and services to meet their financial needs.”
  • Loan promotions and marketing. “We run promotions throughout the year. In the spring we might run an auto loan promotion, for example. And in the summer, a vacation loan. Targeted loan promotions remind members that they don’t need to look beyond their credit union for their lending needs.”
  • Auto recapture. “Even if you didn’t get the loan the first time around that doesn’t mean you can’t get their business. I might be working with the member on another loan product, and if while reviewing their credit report I learn they have an auto loan elsewhere, I’m going to try and compete for that loan.”