TransUnion Survey: Credit Unions Cite Loan Growth as Most Important Business Issue in 2014

Survey of Credit Union Executives at CUNA Government Affairs Conference Indicates Auto Loans Present the Most Significant Opportunity for Credit Unions' Growth This Year

Marketwired

CHICAGO, IL--(Marketwired - Apr 1, 2014) - A new TransUnion survey reveals that nearly three-fourths (72%) of credit union executives who attended a recent industry meeting identified loan growth as the most significant issue facing the credit union industry in 2014, with nearly half of respondents (49%) citing loan growth as the singular most critical issue. The survey was completed by 64 executives at the CUNA Governmental Affairs Conference in Washington, D.C. in late February.

Among the industry executives surveyed, more than half (57%) identify auto loans as the biggest opportunity for growth. Trailing by a wide margin were deposit accounts, which were the second most frequently cited by significant business opportunity among survey respondents.

"With delinquency rates at historic lows and consumers prioritizing auto loans above other credit instruments, credit union executives continue to view auto loans as a significant driver of near-term growth," said David Dodson, credit union vice president in TransUnion's financial services business unit. "Credit union members should anticipate strong auto loan financing offers throughout 2014."

The results of the survey of industry executives are consistent with TransUnion's recent Industry Insights Report (IIR), released in mid-March, which found that while the auto loan debt-per-borrower and delinquency rate increased, they remain at relative historic lows. The national auto debt-per-borrow rose to $16,769 in Q4 2013 from $16,060 in Q4 2012, marking 11 consecutive quarterly increases. The auto loan delinquency rate also increased -- rising to 1.14 percent in Q4 2013 from 1.04 percent in Q3 2013 and 1.09 percent in Q4 2012. The IIR is TransUnion's quarterly overview summarizing data, trends and perspectives on the U.S. consumer lending industry. The report is based on anonymized credit data from virtually every credit-active consumer in the United States. 

"While our recent report identified an uptick in the auto loan delinquency rate, we believe that delinquencies will continue to remain low in the coming year," added Dodson.

What's more, TransUnion's recent annual Payment Hierarchy study, which evaluates the priority in which borrowers repay mortgage, credit and auto debt, found that consumers place a steady emphasis on paying their auto loans before their mortgages and credit cards. In fact, consumers have repaid auto loans at a higher rate since at least 2003, when the study was first conducted.

Additional concerns cited by credit union executives include:

  • Increased regulation: Regulation was cited by 34 percent of respondents as their biggest challenge to loan growth in 2014, making it the second most cited top challenge. In all, regulation was cited by more respondents (57%) as being among their top challenges than any other issue. 
  • Expanding membership: Concerns among credit union executives about expanding membership increased by 26 percent in 2014 (from 6 percent in 2013 to 33 percent in 2014).
  • Competition for greater market share: 54 percent of respondents cited competition as their biggest challenge to loan growth in 2014, up from 40 percent in 2013. 

About the Survey
The 2014 survey was conducted at the CUNA Governmental Affairs Conference in Washington, D.C. in late February and garnered 64 survey respondents. The 2013 survey was also conducted at the 2013 conference and received 104 responses. All respondents are based in the U.S. and are board members, executives or in managerial roles at their credit union.

About TransUnion
As a global leader in credit and information 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 comprehensive data and advanced analytics and decisioning. For consumers, TransUnion provides the tools, resources and education to help them 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

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Dave Blumberg
TransUnion
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