ARLINGTON, Va. — In the current margin-squeezed, low interest rate environment, credit unions may want to consider whether the members they're courting are in it for the long haul, said one industry expert.
Responding to a new Aite Group credit union report that found most count finding ways to attract new members among their top challenges, Tun Wai, director of research and analysis and chief economist at NAFCU, said a different approach might be in order.
"One thing [the credit union industry's economists] have been saying is not to look at the growth of membership but the quality of membership," Wai said. "You have to think about whether expanding is attracting the members you want to attract."
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According to the Aite report, which surveyed 101 credit unions with $100 million in assets, 34 percent said wooing new members is a challenge.
"We've been in this low interest rate environment. The [margin] squeeze is probably going to continue," Wai said. "Delinquencies may go up. Credit unions have to think about whether the members they're making loans to will be able to repay."
Still, credit unions are meeting their members' needs despite not "changing their lending standards tremendously" with the exception being risk-based pricing, Wai said.
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