The Excellence in Lending Awards were established by the CUNA Lending Council and CUNA Mutual Group in 2000 to recognize credit unions that have implemented outstanding lending programs while demonstrating sound financial performance. The annual awards provide an opportunity for credit unions to share best practices and ideas, build networks, and recognize and celebrate lending excellence.CONSUMER – Assets More than $250 Million:
Consumers Credit Union
($453 million in assets; 52,000 members)
Consumers Credit Union of Kalamazoo, Mich., listened to its members during the economic downturn and developed a highly successful home equity product that benefited the credit union, but more importantly addressed needs of members near retirement. The “Silver Lining” home equity loan program meets a need for near-retirees with good credit and equity with a desire to pay off their mortgages before retirement. A no-closing cost home equity loan, Silver Lining is a short-term 3, 5, 7 and 10-year loans as low as 2.99 percent that allows members to accelerate debt repayment and consolidate debt. Consumers’ home equity portfolio has experienced substantial growth since Silver Lining’s inception, with very low loss ratios. Member education was key to the success of Silver Lining as staff helped members understand the value of Silver Lining over simply refinancing a mortgage.CONSUMER – Assets Less Than $250 Million:
Texell Credit Union
($227 million in assets; 30,000 members)
Texell Credit Union of Temple, Texas, identified weaknesses in its consumer lending program in 2008. By developing new products and underwriting procedures, implementing a sales-driven, relationship-building culture and by making a number of operational improvements, the credit union achieved the highest loan-to-share ratio in its history, including higher average loan balances per member and more members that are borrowers. At the end of 2007, about 22.9 percent of members were lenders. By the end of 2012, that number increased to more than 51 percent. At the same time, average loan balances increased from $9,249 to $10,736. Also during that time, Texell went from a centralized lending model to a hybrid, which pushed many loan decisions to the branch level.MORTGAGE – Assets More Than $250 Million:
($764 million in assets; 57,000 members)
Texas Trust Credit Union of Mansfield, Texas, had a $61 million mortgage portfolio in 2006 that looked sound, but in many cases the average income generated from each loan was less than the cost to originate it. Texas Trust started by stabilizing the mortgage operation: aligning staff, improving efficiencies and making sure the right people were in positions to meet the challenge.
With more than 50 percent of its production being home equity loans, Texas Trust identified market needs and began marketing what turned out to be more than 100 different first and second lien mortgage choices. They utilized a variety of channels, including TV, print, and digital and social media to proactively tell their mortgage story. Those awareness efforts paid off with member penetration for mortgage lending increasing from two percent to 15 percent. MORTGAGE – Assets Less Than $250 Million:
Limestone Federal Credit Union
($38.5 million in assets; 4,000 members)
Limestone Federal Credit Union of Manistique, Mich., had all the financial ratios a credit union could ask for, but that wasn’t enough for the Upper Peninsula credit union. LFCU, serving low-to-modest income members, measures success by the financial stability of its membership, so staff rolled up their sleeves. A deep dive into the credit union’s shortcomings and opportunities included polling members and rating products and services. An important part of LFCU’s strategy was educating employees on thrift. Consumer education and teaching thrift is a cornerstone of LFCU’s lending business. When 10-year, fixed rate mortgages were offered, members thought they couldn’t afford them, but by educating them against the buy now, pay later mentality, many members were put on a path to becoming financially independent. MORTGAGE – Assets Less Than $250 Million:
Upper Cumberland Federal Credit Union
($32 million in assets; 5,400 members)
Upper Cumberland FCU of Crossville, Tenn., wanted to break out of a stagnant lending period and did just that via marketing, employee buy-in and some innovative mortgage lending. One of UFCU’s more creative mortgage offerings was a 10-year, fixed-rate product with a 3.99 percent APR with no origination fees for members that owed $75,000 or less on their home and had a minimum credit score of 680. The mortgage hit a special need in the community as many members consolidated all their debt into one payment. The mortgage special was so well received that it was offered for six months. In addition, UCFCU is a firm believer that all employees should have a stake in keeping the loan-to-share ratio and delinquency at the desired levels, and financially rewards hourly employees when those goals are met.BUSINESS:
($1.6 billion in assets; 202,000 members)
GTE Financial, of Tampa, Fla., had a business loan portfolio heavy on large commercial loans on hotel property during a collapsing economy. Foreclosures on these mortgages were threatening the existence of the credit union’s business lending operation, so wheels were put in motion to reinvent the business. In October of 2010, GTE Financial’s business services staff decided to bring the credit union philosophy to the small business community with a focus on building relationships and providing loans to local, small businesses, which were ignored by competitors. The new strategy put lending targets at $750,000 and under. By building relationships with the local, small businesses, GTE Financial had less competition, more opportunity, and reduced risk. The new strategy is increasing interest income lost as a result of legacy portfolio issues and the credit union has built a sustainable growth model for business lending centered on opportunities for small business in the Tampa area. GTE Financial has successfully brought the cooperative credit union philosophy to the small business community after surviving an attempt at large, commercial lending.LOW-TO-MODEST MEANS:
Texell Credit Union
($227 million in assets; 30,000 members)
Texell Credit Union of Temple, Texas, has transformed its lending strategy to better serve a predominantly low-income membership base. That transformation has propelled loan performance to the highest in the credit union’s history, including the highest loan-to-share and borrower-to-member ratios in the credit union’s history. All this was accomplished while keeping delinquency and net charge-offs well below peer and industry averages. This year’s double winner places a high priority on financial literacy and couples that by offering affordable loan products that meet their members’ needs. Some of those loans include Holiday Loans, a payday alternative extended, regardless of credit score; Yes! Loans, aimed at members and potential members previously denied loans and Aspire Credit Card, a partially or fully secured card. The sales and service culture mantra is treating members fairly and with respect, regardless of their credit affluence. Member surveys in 2012 rated that loan satisfaction score of 4.70 on a 5.00 scale and 96 percent of responded would recommend the credit union to others. The practice of treating members with respect has built a very loyal membership base.
Judges for the 2013 Excellence in Lending awards included: Consumer Lending -- Patrick McElhenie, Sales Planner, CUNA Mutual Group; Stacy Fifield, SVP/CLO, Travis CU; Fawn Terwilliger, VP Lending, Service CU; Mortgage Lending – Keith Troup, VP/CLO, WSECU; Jim Jumpe, Marketing Director, CMG Mortgage Insurance Co.; Bill Vogeney, EVP/CLO, Ent FCU; Business Lending – Dale Frankhouse, Business Services Director, Sun FCU; Tom Keepers, Director, Product Management, CUNA Mutual Group; Bob Stowell, SVP/COO, US FCU; Low-to-Modest Means – Aaron Bresko, SVP/CLO, GTE Financial; Vicki Lovett, SVP/CLO, Suncoast Schools FCU; Dan Murray, VP Lending, CUNA Mutual Group.
The CUNA Lending Council is a community of nearly 1,200 credit union lending professionals dedicated to being the primary source of the best lending practices and educational opportunities in the industry. The Lending Council is one of the six organizations that make up the CUNA Councils, a network of more than 5,800 credit union executives.
CUNA Mutual Group insurance, retirement and investment products provide financial security and protection to credit unions and their members worldwide. With more than 75 years of true market commitment, CUNA Mutual Group’s vision is unwavering: To be a trusted business partner who delivers service excellence through customer-focused products and market-driven insight. More information on the company is available on the company’s website at www.cunamutual.com
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