Exchanging lending ideas
CLO Exchange allows lenders to share programs, plans, concerns.
Credit union lenders get excited about offering members new loan products to meet their needs.
During the CLO Exchange at the 2022 CUNA Lending Council Conference Thursday in San Diego, lenders gathered and exchanged information about various lending programs that they’re rolling out at their credit unions. Programs included:
- Payday alternative loan product.These will allow a low-income designated credit union to “fill a gap” and serve individuals who otherwise would have had to get financing through payday lenders at high interest rates.
- Small business lending. One credit union attendee was excited about signing a contract for back-office support that will allow the credit union to enter into Small Business Administration (SBA) lending and meet member demand while allowing the credit union to address concentration and diversify its loan portfolio.
- ITIN lending. A credit union from Washington reported it recently launched ITIN lending. Forty-three percent of these loans were made to people who either had no credit score or a low credit score, and there have been no delinquencies so far.
- Emergency/short-term loans. Multiple lenders in attendance have launched emergency or small dollar loans that were based on the relationship the member had with the credit union. These loans—generally up to $2,000—were applied for and funded online, required no credit checks, and had flat interest rates.
- Debit card purchases to short-term loans. When a member makes a higher-value debit card purchase at one attendee’s credit union, the member receives a message giving them the opportunity to turn the purchase into a short-term loan. If the member accepts, the payment is refunded and the purchase is turned into a loan. The credit union is in control of setting the parameters—amount, interest rate, and length of loan.
During the first half of the session, a panel of experts discussed different approaches and options for credit unions to manage liquidity needs in order to position themselves for a 2023 in which strong liquidity and earnings profiles remain.