Now more than ever, being attuned to the local employmentclimate and other trends may help credit unions boost stalled loanportfolios.

In offering that advice, CUNA Mutual Group Chief Economist DaveColby said he is not expecting the economy to provide a lift tocredit union lending for the next two years.

“Rather, credit unions can grow loans by leveraging localknowledge of employment conditions and collateral valuationtrends,” Colby suggested. “Well-underwritten, fairly priced locallending will help members, improve the economic prospects for thecommunities credit unions serve and boost net income.”

Year-to-date through July, credit unions have yet to regaintheir seasonal loan peak, Colby said.

At $580 billion, total loans were down 0.3% over the past year,according to CUNA Mutual's September Credit Union Trends Report.

First mortgages, used vehicles and home equity loans were theonly portfolios up YTD and year-over-year, the data showed. Still,a combined decline of $15.3 billion in new vehicle and secondmortgages could not be offset by gains in other portfolios, Colbysaid.

Real estate secured loans were up 0.1% YTD and 0.2% since July2010.Total vehicle loans were down 2.0% and 0.3% YTD.

Mid-year data showed 59% of all credit unions reported loanportfolio declines over the past 12 months. Colby said this groupheld 47% of industry assets. Included in this group were 47% of the$1 billion-plus credit unions.

“With the yield spread between average loan and investment ratesnow at 413 basis points, searching out and granting member loanswill help the nation's credit unions replenish capital and buildfinancial strength,” Colby said.