Low Loan Market Shares Point to Opportunities for Credit Unions

By Jon Haller
Director of Market Research, CUNA

As many credit unions work to increase their lending volume through seeking additional members and adding select employee groups (SEGs), they should not lose sight of the possibilities for increasing loan volume within their already existing membership.

The fact is, for each of the four major loan types, credit union members who have these loans are more likely—and in some cases, dramatically more likely—to have taken their business to another provider than to their credit union.

Stepping-up efforts to meet the loan needs of your higher-income members—most who are probably relying heavily on other institutions for their loan needs—is one key to helping raise your loan market shares.

Members with household incomes of $75,000 or more are far and away the income group least apt to choose a credit union as their primary institution (PFI). What’s more, it’s not at all unusual for a credit union’s higher-income members to be the income group most apt take their loan business elsewhere, according to member surveys CUNA conducts for individual credit unions.

While a great deal of emphasis—and rightfully so—has been placed on identifying how credit unions can better serve the financial needs of their low- and moderate-income members, the fact remains that our higher- income members are members, too, and as such, deserve to have the credit union work just as hard to meet their financial needs.

Evidence suggests that higher-income members generally have higher expectations when it comes to the loan service they receive. They expect faster loan approval, access to higher credit limits, lower rates and more- knowledgeable loan officers than do other members.

Monitoring your higher-income members’ perceptions via member surveys and taking steps to ensure that your credit union is performing well in meeting their expectations is one road that can lead to improved loan market shares.

Loans are out there to be had. An ability to meet your higher-income members’ higher expectations can go a long way in helping bring more of these loans to your credit union, where they belong.

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