CHICAGO, IL – Approximately two in three credit union executives see loan growth as the critical business issue facing their industry in 2013, according to a new survey from TransUnion. Auto loans may be the main focus of that growth. The survey found that more than half of credit union respondents believe auto loans are their biggest opportunity.
TransUnion administered the survey to 104 credit union executives at the CUNA Governmental Affairs Conference in Washington, D.C. in late February. Nearly all respondents from across the U.S. were board members, executives or in managerial roles for their credit union.
“Many credit unions are finding that auto loans provide a great revenue opportunity as delinquencies continue to stay near historic lows,” said David Dodson, credit union vice president in TransUnion’s financial services business unit. “TransUnion projects auto loan delinquencies to continue to remain low with balances rising for the remainder of the year — pointing to more new and used auto sales.”
TransUnion’s latest auto loan Trend Data report found that 60-day auto loan delinquencies stand at 0.41% as of Q4 2012 and will likely remain around 0.40% at the end of 2013. Bank auto debt per borrower has risen for seven straight quarters, and it is expected to rise from $13,747 in Q4 2012 to well over $14,000 by the conclusion of this year.
In a sign that the housing market may be improving, the survey found that some credit union executives believe their best opportunities for loan growth are with mortgage (18%) and small business (13%) loans. TransUnion data also supports this as 60-day mortgage loan delinquencies are expected to experience a double-digit percentage drop in 2013.
While the far majority of credit union respondents (68%) said loan growth was the biggest critical issue they were facing this year, 11% noted that regulation was their main concern. Technology/operation efficiencies (7%) and membership growth (6%) were also cited as major issues for 2013.
Credit union respondents said their biggest challenges to meeting loan growth goals are competition from large banks and captives (40%), regulation (27%) and the lack of prospects (17%).
“Loan growth is traditionally the biggest concern for credit unions, but it is interesting to see regulatory scrutiny and operational efficiencies called out as critical issues by some credit unions,” said Dodson. “Credit unions realize that to effectively compete and grow in today’s market, technology and analytics must be leveraged to help in acquisition efforts and to know how to best maximize members’ wallets at the right time in the customer lifecycle.”
As a global leader in information and risk management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering high quality data, and integrating advanced analytics and enhanced decision-making capabilities. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Founded in 1968 and headquartered in Chicago, TransUnion reaches businesses and consumers in 33 countries around the world on five continents. www.transunion.com/business