Credit Unions Seek Out Loan Participations for Portfolio Diversity, Return on Earning Assets

WASHINGTON - Member business lending has opened up a window for credit unions to participate in loan participations. Since June 2004, the nation's top 15 credit unions in loan participations saw a 185% increase in the number sold and a 120% increase in the number bought, according to Callahan & Associates, Inc. At the top of the list is $640 million Evangelical Christian Credit Union, which generated 38.3% of the $1.1 billion business loan participation sellers market. The $3.5 billion Patelco Credit Union and $1.5 billion Texans Credit Union led the way on the buying side as both captured 19.5% of the $1.6 billion on the purchasing end. Member business lending has opened a number of avenues for growth, Callahan found, including the popularity of loans participations. The loan arrangement offers portfolio diversification and can increase the return on earning assets. -msamaad@cutimes.com