Credit unions have seen many positive signs in the past couple of months. Interest rates continue to remain at record lows, cash deposits surprisingly have increased, loan delinquencies are down, the unemployment rate is improving, and auto sales are looking strong. For credit unions looking to increase their auto loan origination portfolio, the forecast for the coming quarters is bright. Let us unpack some of these details and ensure you get the greatest return on investment.
Credit union members added deposits faster than the institutions could lend them, resulting in a 19.1 percent YoY increase and a 12-month record. This influx in cash has prompted institutions to expand their loan criteria to capture a broader range of loan originations. Consider evaluating your loan approval process to consider those high-value customers who experienced a blip in their employment history, recently graduated from college but have a higher debt-to-income ratio, or thin-file clients who are adding a side gig and need a different type of vehicle. There are many strong indicators which can make these loans profitable and expand a credit union’s market share to new communities and demographics.