HARRISBURG, Pa. — Amid the nation's economic uncertainty, credit unions in Pennsylvania and elsewhere are now being viewed as having bedrock stability, making it imperative that they "shine and grow," according to President/CEO of the Pennsylvania Credit Union Association James McCormack.
In a candid letter to members appearing on PCUA's e-mail newsletter, "Life is a Highway," McCormack appealed to Pennsylvania CUs to do more than ever to demonstrate a willingness to help stressed borrowers in such areas as mortgage, small business, student and automobile loans.
"Most of you should be flush with cash in the next several months as the flight to quality and safety grows your deposits, shares, money markets and certificates, which is reminiscent of five-six years ago," wrote McCormack.
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At the same time, "you are not dependent upon third-party, national or worldwide capital markets" to extend credit for mortgages, home equity "and even student loans," he wrote.
Echoing a theme made by speakers at CUNA"s annual Government Affairs Conference earlier this month, McCormack wrote to PCUA members, "you have great prospects to grow in this market, but you need to publicize that you're not just open for business, but looking for business and looking to do business with consumers and your local community as their financial institution."
A CUNA spokesman said McCormack's remarks were to be applauded and that others in the national organization are now voicing similar sentiments.
"Jim McCormack's letter is an example of what has become a focus for credit unions and leagues around the nation," said the spokesman. "Growth is, in fact, one of CUNA's top priorities and that credit unions should consider the positive opportunities in the current
situation."
The chairman of the American Association of Credit Union Leagues, Roshara Holub, President/CEO of the Missouri Credit Union Association, also praised the McCormack letter as a positive move, adding that she is planning to pen a similar membership letter in April.
"I think that letter is a good message that credit unions are part of the solution," said Holub.
Because they are well-capitalized, CUs now "have a great opportunity to provide financial solutions in a volatile economy," she said. "Helping consumers obtain affordable mortgages, helping students obtain reasonably priced education loans, and helping small business have access to credit all contribute to strengthening and stabilizing the economy." A byproduct of all that "can also be, of course, credit union growth."
In his letter, McCormack reminded CUs they should not be "interested in throwing out good credit quality, character standards and capacity, as many lenders did over the last few year."
"But there is opportunity to make first- and second-mortgage loans to good people," he said. On lending to small business, it is apparent credit from banks and other avenues "is becoming non existent." Thus, "you have an excellent opportunity to establish business relationships with small companies within your field of membership for lending, deposit services and other account relationships."
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