January Edition
Welcome to the January edition of our newsletter, your go-to source for insights, updates, and news from the world of lending and financial services. This month we bid farewell to a challenging year and look ahead to the growth opportunities in 2025.
Year-End Falls Flat, but Reason for Optimism in 2025?
Let’s be honest, there are few credit union leaders who will bemoan the passing of 2024. Across the system, the year was marred by sluggish growth, increased delinquency rates, and the continuation of a years-long struggle with liquidity.
Can Credit Unions Balance Technology With Tradition?
In the latest 22 Minutes in Lending, leaders from MAC Federal Credit Union share how the organization has seen significant growth, driven by a diligent approach to digital transformation. Discover how this community grounded credit union has effectively bridged the gap between traditional and technical services while keeping their loyal members engaged.
Discover the Future of Community Based Lending
Community-based lenders must address a complex challenge: Balancing a mission-driven approach to lending with the margin-driven needs of running a sustainable business. Discover how Network Lending, a cooperative approach to balance sheet management, is helping credit unions and communities thrive.
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Industry Updates
Borrowers Buoyed by Auto Approvals but Credit Unions?Are Missing Out
A new report from Dealertrack shows that auto loan approval ratings increased 60bps in November, marking the highest level of credit access for borrowers in more than a year. The data also demonstrates continued contraction in loan terms, reducing long-standing LTV concerns, and potentially benefiting millions of consumers.
It’s not necessarily good news for credit unions, however, as TruStage reports slowed growth in 2024 with used auto loan balances falling by 1.2% over the year.
Amends to Credit Reporting Could Spark Borrowing Boon
?In a flurry of early-year activity, the CFPB shook the world of credit reporting, first by announcing a Final Rule to remove unpaid medical bills from credit reports, before turning its sights on Experian; filing a suit that accuses the credit burea of conducting "Sham investigations into credit errors".
The former move would effectively eliminate $49 billion in medical debt for over 15 million consumers, and is expected to boost credit scores by an average of 20 points, leading to upwards of 20,000 new mortgage approvals.
In parallel, FICO announced the Lenders Leading Inclusion? Program, aiming to empower Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) to responsibly expand credit access for underserved communities.
For credit unions, many of which are accredited CDFIs or MDIs, both of these changes to credit reporting offer cause for yet more optimism in the year ahead.
LendKey Updates
Loan Participations 101: A Practical Guide for Credit Unions and Community Banks
Loan participations have become an increasingly popular tool for credit unions and community banks to manage their balance sheets, diversify risk, and enhance liquidity.
This guide explores the fundamentals of loan participations, their benefits and risks, and practical strategies for implementations.