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BOCA RATON, Fla. – CUNA Mutual President/CEO Mike Kitchen said he commends credit unions for opening up new lending doors through indirect lending and business lending, but he’s urging credit unions to get more aggressive with all consumer loans – especially home loans. Kitchen believes not enough credit unions are competing aggressively on the mortgage front. “Let’s not give up on that core business,” stressed Kitchen. He said he’s not knocking CUs for getting into new areas, like business lending, but CUs shouldn’t give up on mortgages because it is a key relationship for becoming a member’s primary financial institution. He delivered the message loud and clear at CUNA Mutual’s Discovery Conference held in Boca Raton, Fla. Having 2.5% of the mortgage market isn’t enough for credit unions, said Kitchen. He’s concerned that the institutions that get home loans into the hands of consumers are going to be the places those consumers turn to for years to come, so credit unions risk losing long-term loyalty. Home equity loans are one of the hottest products out there for consumers and a good way to ease their debt load. Kitchen believes credit unions should be trying to put this credit into members’ hands before they start shopping around. “If I can save you $200 to $300 a month by paying off credit card debt with a home equity loan, you’re going to like me. If I keep doing a good job, you’re going to stay with me,” said Kitchen. He said the following numbers worry him: * Of every 10 auto loans taken out by members, only three are financed at the credit union; * Fewer than one in 10 members’ mortgages are provided by the credit union; * For home equity loans, it’s two of 10; * For personal loans, it’s three of 10; * And only 3% of the nation’s credit card balances are held by credit unions. One way CUNA Mutual is trying to help CUs is by getting the word out faster on competitive products. For example, E*Trade’s portable mortgage drummed up a lot of press and interest. The very next day it was announced CUNA Mutual had correspondence out to over 8,000 credit unions informing them about the product and explaining the realities of a portable mortgage, which aren’t good for many people. Kitchen was a bit critical of CUNA Mutual’s efforts in helping CUs combat the wave of 0% finance deals for auto loans. He said CUNA Mutual didn’t move quickly enough to inform credit unions about how to compete with these deals – that won’t happen again. Kitchen said CUNA Mutual has all the tools credit unions need to ratchet up their mortgage efforts with its mortgage company and call center and online support. “I hear that members just shop price. That’s a crock. The kind of credit and debt out there shows that. Members are loyal, but are we servicing them?” said Kitchen. It’s no secret that more lending by credit unions helps CUNA Mutual’s bottomline as it increases their credit insurance business, which is down so far this year. But Kitchen said that’s nothing new, CUNA Mutual’s success will always depend on credit unions’ success. “If credit unions aren’t doing things to make their members’ lives better, they’re not doing enough.” Kitchen also pointed out new pockets of untraditional competition CUs now face, such as the likes of State Farm, Wal-Mart and others. He pointed out that Circuit City even generated 58% of revenues from its financing products. [email protected]

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