Despite a lingering lending slump, several credit unions managedto grow their loan portfolios by more than 5% during the GreatRecession.

The Filene Research Institute highlighted some of those creditunions in a new report, “Superior Consumer Lenders During the GreatRecession.”

Only 23 out of more than 2,200 U.S. credit unions larger than$50 million grew their new and used auto loan portfolios by morethan 5% each year between 2008 and 2010, and only 11 of those alsogrew their credit card portfolios by 5%, the data revealed.

Filene said its researchers conducted qualitative interviewswith 12 of the 23 credit unions with many of them hailing from theMidwest and Texas. Several common strengths emerged among the 12credit unions featured. Among them were consistent underwriting, afocus on improving sales culture and an emphasis onrefinancing.

The credit unions featured were the $95 million Acadia FCU inFort Kent, Maine, the $194 million Baton Rouge Telco CU in BatonRouge, La., the $203 million Columbus Metro FCU in Columbus, Ohio,the $54 million Daniels-Sheridan FCU in Scobey, Mont., the $71million Education Plus CU in Monroe, Mich., the $1.1 billion GesaCU in Richland, Wash., the $170 million Hutchinson CU inHutchinson, Kan., the $506 million SAC FCU in Bellevue, Neb., andthe $737 million Scott CU in Collinsville, Ill.

The three Texas credit unions profiled were the $1.2 billionEECU in Fort Worth, the $732 million Fort Worth Community CU inBedford, and the $6.5 billion Security Service FCU in SanAntonio.

Through marketing power, a handful of the credit unions wereable to leverage strong positions in a local economy or particularproduct line to make themselves first-choice lenders even duringthe downturn, according to Filene.

While the report focused mainly on auto and credit card lines,several credit unions attributed their consumer lending success tocross selling from other products like mortgages or agricultureloans.

Filene found that a minority of credit unions interviewed gottheir loans through traditional, direct means, such as relying onexisting members, branch traffic and steady cross selling. Still,the majority captured their lending growth primarily from indirectlending. Each cultivated strong dealer relationships, invested intechnology and set its own underwriting standards.

“Even though each credit union was able to keep growing loansthroughoutthe downturn, none had stumbled upon a wholly new product orprogram,” said Ben Rogers, research director at Filene.

Most of the credit unions featured are in the Midwest–Illinois,Indiana, Iowa, Kansas, Michigan, Nebraska, and Ohio, Rogers noted.Texas had four high performers. None of the lenders was in a SandState and very few were on either coast.

When it came to sales culture, Rogers found that some of thesales tactics used were cash incentives for loans of a certainsize, incentives for the fourth product sold to a member andsoftware that flagged credit card sales opportunities for memberswith other credit union loans. Filene defined sales culture ascross selling, sales-specific training for employees and definedproduct sales goals for member-facing staff.

Six of the 12 credit unions interviewed identified consistentunderwriting as a key differentiator for their lending successes,the report noted. Historically, it had positioned them as stable,meaning they were able to manage delinquencies and losses goinginto the recession. They also didn’t radically alter their terms insearch of new members or new revenue, the data showed.

For those credit unions that relied more on direct lending,Filene found that refinancing was a key factor for lendingsuccess.

“Refinancing success often relies on good data mining toidentify the most likely targets for refinancing, but the creditunions that felt they were successful also emphasized theimportance of loan officers having the data and then activelyasking for the business,” the report read.

Filene defined market power as “being a sufficiently large andwell-known institution so that the credit union’s actionssignificantly influence the market it serves.” One credit unionprofiled had hundreds of indirect dealer relationships that enabledit to leverage its size, speed and consistency to earn significantmarket share. Even though two of the credit unions profiled weresmaller and located in small communities, they were able to have alarge presence.

Another factor that emerged within the credit unions profiledwas symbiotic product lines. Two of the 12 credit unions insistthat their consumer lending success wouldn’t have happened withouttheir success in other areas. Mortgage lending for one credit unionfeatured proved to be a link to auto and credit card loanopportunities. Another cooperative was able to link agricultureequipment lending to auto loan leads.

The survey separated those who rely on direct lending to membersor potential members, as opposed to loans that come from auto orother dealers, for more than 50% of their consumer loan growth.According to the report, four of the 12 credit unions primarilygrew their consumer lending through direct-to-member channels,although three of those also counted some indirect lendingactivity.

Eight of the 12 credit unions interviewed relied heavily onindirect lending for their consumer loan growth. Despite theirsuccess in indirect, all spoke of the need to prioritize growththrough other channels and to cross sell new indirect members onother credit union products.

Filene also found even “the leaders who relied heavily onindirect lending often expressed concerns about this practice butthey also argued that the convenience for consumers is the drivingfactor in car-buying decisions, which credit unions have longrecognized.”