Lending a Hand

Posted by Greg Michlig Friday, August 30, 2013 10:11:00 AM

It’s no secret that increased lending activity is a primary goal for the majority of credit unions. A strong loan portfolio equates to healthy performance relative to many credit unions’ key ratios. It’s also no secret that loan growth is lagging here in New Jersey, as opposed to most other states. Statistics have pointed this out for an extended period of time. And now, with the NCUA’s Quarterly U.S. Map Reviews presenting visual representations of this over the past two years, it stands clear that there is work to be done.

This has been a regular topic of conversation from the time I first met with the NJCUL Board of Directors to as recently as two days ago when I was visiting with a credit union CEO. As we discussed, I see this not as plight, but as opportunity. Here at the League, we are continually looking for ways to assist you in getting the message out to the many who still view credit unions as savings institutions and not lenders of choice.

Later this morning we will be meeting with some of the key players involved in the green energy loan initiative. This has been a priority since my first day on the job here in New Jersey and has also been a monumental task. The model here in New Jersey is different than those in other states where such loans are offered, meaning there were and still are many variables to address. We have cleared many of the hurdles that stagnated the project and, I am pleased to say, we are moving towards the pilot and implementation phases of this initiative. As a matter of fact, included in the key players at today’s meeting will be representatives from seven potential pilot credit unions. This opportunity won’t be for all credit unions, but it will provide a new lending channel for those where there is a fit.

The Banking You Can Trust campaign is also heavily tied into lending. By building overall awareness through the campaign, we are inherently promoting the value of credit unions as a trusted source for financial services. In most spots, there is specific reference to consumer lending.

Business lending is also a topic in select Banking You Can Trust ads. As we read about MBL growth throughout the credit union movement, we need to be sure we are taking steps to ensure that same growth surfaces here in New Jersey. I have engaged a variety of credit union CEOs from throughout the state and from a wide span of asset sizes to discuss how NJCUL can provide resources and expertise to help drive member business lending. As we evaluate the options and continue this dialogue, I invite you to contact me (gmichlig@njcul.org) with any thoughts you have on this topic.

And, of course, one cannot discuss MBL without acknowledging the need for MBL reform. We continue to present our case to legislators that increasing the 12.25% cap to the proposed 27.5% is essential to credit unions’ ability to provide lending to businesses in need. Credit unions have proven they are there for small businesses, while commercial bank lending has decreased by 10% over the past five years.

On a final note, just a quick reminder that the New Jersey Credit Union League's 79th Annual Meeting and Convention is just around the corner: September 29, 2013 to October 1, at the Trump Taj Mahal in Atlantic City, N.J. Many of you are set to go, but if you haven’t already done so, please register today. I am looking forward to seeing you all there!


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