According to a new survey from TransUnion, credit union executives believe auto loans will be their biggest opportunity to grow their loan portfolios this year.
TransUnion said it administered the survey to 104 credit union executives at CUNA’s Governmental Affairs Conference held in Washington in late February.
More than half of the respondents said auto loans have the greatest potential for loan growth.
“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.
Credit union respondents said their biggest challenges to meeting loan growth goals were competition from large banks and captives (40%), regulation (27%) and the lack of prospects (17%).
Meanwhile, 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.
“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,” Dodson said.
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, according to the TransUnion survey. Technology/operation efficiencies (7%) and membership growth (6%) were also cited as major issues for 2013.
“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,” Dodson said.