Financing small-ticket items was once a popular offering at credit unions.
However, over the past 15 years, the credit card has taken the place of unsecured loans for financing, according to a new white paper from the CUNA Lending Council, “Fighting for our Turf: Threats to Credit Union Loan Markets.”
According to the council, the credit card has become a substitute for the installment loan, albeit at a higher price, for items such as electronic equipment, furniture and jewelry.
With advances in technology and shifts in consumer behavior, though, a number of opportunities still exist for offering small loans, the council noted.
The white paper focuses on how credit unions can regain these lending opportunities and make the portfolio viable.