09:50 AM

Beyond the Data: For Credit Unions, It’s All About the ‘G Word’

Growth, growth and more growth – the "G word" was the word du jour for many credit union executives I spoke with during TransUnion’s annual credit union seminar last month. Credit unions taking on more risk to gain market share is a continuing development. However, in recent years, a “measured risk” approach appears to be the way to loan growth.

Recent TransUnion data show that credit unions are taking on more informed risk, especially with mortgage loans. Refinements to the credit risk profile have been part of the reason why credit unions experienced a mortgage loan market share increase from 7% to 11% between the first quarters of 2013 and 2015. In fact, credit unions experienced 25% yearly growth in non-prime originations during the first quarter of 2015 while the rest of the industry only saw a 4% rise.

I had the pleasure of speaking to several credit union executives during the seminar, and it was apparent that loan growth doesn’t necessarily just mean more loans for non-prime consumers. It appears that all consumer risk groups are contributing to the growth of credit union mortgage loans. By obtaining more enhanced credit data such as CreditVision, credit unions are in a better position to underwrite loans. TransUnion research confirms that this truly is a good thing for both lenders and those consumers seeking loans as millions of consumers could potentially benefit from the use of enhanced data.

Both our research and data show that now is a terrific time to be in growth mode – whether you are a credit union, small bank or one of the larger financial institutions in the country. Serious mortgage loan delinquency rates have been dropping for the last four years, and pre-recession levels are not far away. While the housing market is on a path of recovery, further and more meaningful improvements are anticipated over the course of the next five years. By increasing their market share now – in certain credit risk groups – credit unions are in a position to sustain this growth when the housing market starts rolling once again.

Nidhi Verma is the director of research and consulting in TransUnion’s financial services business unit. Verma can be contacted directly at