Student Lending Engenders No Bank-CU Battle
Credit unions and community banks have traditionally stood as direct competitors, vying for the attention of similar types of consumers. But in the private student lending market, a fierce face-off between the two is not expected, several experts say.
“As far as competition goes, some existing lenders are scaling back their presence in the market, but new lenders are cropping up all the time,” said Greg Jaeger, the private student loan manager for the $4.6 billion, Peoria, Ill.-based Citizens Equity First Credit Union. “It is hard to say how much competition is coming from community banks. In any case, competition among lenders is good for borrowers.”
"Competition from community banks is not something we’re seeing in Wisconsin," he said. “We see the usual suspects, like large banks and Sallie Mae, but we’re not even seeing regional banks get into it.”
Long said community banks might get into student lending for the same reasons credit unions would, such as to start developing relationships with young consumers. However, he doesn’t expect student loans to become a priority for community banks.