Virginia Credit Unions' Business Lending Programs Spotlighted
MERRIFIELD, Va. -- Several Virginia credit unions were recently profiled on the strides their business lending programs have made with members.
In a June 8 article, the Virginian Pilot talked about the increase in member business loans among credit unions over the past three years despite the loans accounting for less than 5% of all credit union lending.
The $29 billion Navy Federal Credit Union's new program had 215 business loans on the books at the end of March, an 18% increase from the previous year, the publication reported. The dollar volume of the business loans totaled $19.33 million, a 12% increase from March 2006.
The $355 million ABNB Federal Credit Union was also profiled in the article. Mike Doland, executive vice president, told the publication one attraction for ABNB is the additional deposits that business lending relationships can generate. Because of the 12.25% of assets member business lending cap, ABNB is limited to $44 million in business loans, "an amount that a skilled lending officer can generate in a single year," Doland said.
The $890 million Newport News Shipbuilding Employees' Credit Union recently began promoting a new business lending program on its Web site, but said the program is still awaiting a rollout to its members, according to the article. Business loans are also offered to members by $485 million 1st Advantage Federal Credit Union. The $1.2 billion Chartway Federal Credit Union said it has provided occasional loans to members who were buying equipment for a business, but after looking "at it five or 10 years ago...decided that business lending was not part of our core focus," said Ron Burniske, president/CEO.
CUNA Spokesman Pat Keefe told the publication that for more than 40 years, auto loans "have been the bread and butter of credit-union lending", but because new car lending grew less than 6% last year and used car loans rose less than 1%, "[business] loans seem to be a way for credit unions to pick up the slack."
Banking groups continue to try and block an increase in credit unions' business lending authority, the publication reported.
"On a daily basis, we hear from community banks that have been outbid for business by credit unions that are much larger than they are," said John Hall, a spokesman for the American Bankers Association.