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HONOLULU-Speaking on a subject she is becoming increasingly concerned about, NCUA Board Member Debbie Matz stressed the importance of growing membership, which has declined in recent years. As of mid-year 2004, credit union assets have grown 8.5%, while at the same time, membership only grew 2.2%, she said. This should not be the case as potential membership is growing at a record pace. Community charters have nearly doubled from 1999 at 464 to 906 as of year-end 2003, Matz pointed out. Yet, membership penetration is declining, she said. To help reverse this trend, Matz recommended that credit unions look to diversify their membership. Statisticians are projecting certain segments of the population to grow far faster than Caucasians; by the year 2020, Asians are expected to expand 80%, Latinos by 75%, and African-Americans by 28%. In the same time period, Caucasians will grow just 9%. Hispanics and other minority groups are underrepresented in credit unions, Matz stated. These populations can be targeted by adopting underserved areas. “You won’t see much competition from other insured institutions,” the regulator predicted. The process to add underserved areas is fairly simple and mainly consists of a business plan and a marketing plan. A number of items that Matz suggested to include in a business plan were risk-based lending, small dollar loans, affordable mortgages, member business loans, Volunteer Income Tax Assistance, refund anticipation loans, IRnet, and financial education programs. Matz emphasized that she did not mention indirect lending. While many credit unions are becoming heavily involved in indirect lending, which she has expressed concerns over, it is “not a service to get new members.” Few of these borrowers go back and use the credit union for other services as well. She also strongly recommended that credit unions not delegate their loan approval authority. -

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