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NEW ORLEANS – In response to a rapid decline in asset growth from 2001 to 2004, NCUA Board Member Debbie Matz has called on credit union loan officers to offer products to attract new members and rebuild assets. In remarks before CUNA’s Lending Council 10th Annual Meeting, Matz pointed out, “The vast majority of asset growth has been coming from existing members. I have been concerned that credit unions cannot safely sustain this pace into the future. Now we are seeing a significant slowdown in asset growth. The best way for credit unions to regain strong asset growth is to make loans to new members.” Asset growth at federal insured credit unions has declined sharply in recent years-from 14.5% in 2001 to 11.1% in 2002, to 9.5% in 2003 to 6.8% (annualized) in 2004, according to the credit union regulator. “Asset growth has been abnormally high from 2001 through 2003.I think asset growth at 7% is not a bad number; the 10-year average is 8.2%, particularly with loan growth projected to be around 10%,” NAFCU Senior Economist Jeff Taylor said. “However, to maintain strong loan growth it is important to seek out new members and offer new loan products.” To curb the descent Matz highlighted, she suggested that credit unions offer product alternatives to predatory lending, business loans, and affordable mortgages to bolster asset growth. NRS Community Development FCU in Alabama offers short-term loans as small as $200 to help borrowers survive emergencies, Matz pointed out. She shared how $1 billion San Antonio Federal Credit Union and $1 million Shiloh of Alexandria Federal Credit Union have leveraged partnerships to offer mortgages with low down payments, below-market interest rates, and reduced closing costs. “MBLs can reach new members from all ethnic groups,” she added. “For example, many Asian immigrants are leaving farms in their home countries and starting businesses in America. And businesses owned by Latinos have a tremendous need for capital. Only 18% of Latino-owned businesses receive loans from banks or credit unions.” Matz concluded, “Providing these services will diversify your membership as well as your assets. You will reach new markets, fulfill your credit union’s full potential, and lay the foundation for an even stronger future.” However, CUNA Economist Mike Schenk reasoned, “The relatively slow asset growth is a cyclical event. It is not really a safety and soundness concern in the aggregate because credit unions still have plenty of liquidity.” [email protected]

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