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Emerging technologies are expected to create new standards for member convenience and change the fundamentals of the credit union business model. According to surveys conducted by Credit Union Executive Journal and Callahan & Associates, credit union members consider Internet banking as their minimum standards of convenience. The same surveys show that over 1,000 credit unions are predicted to offer Internet banking by the end of 1999. Member demand for a new definition of convenient service through these technologies provides both credit unions and members a win/win situation., Today's emerging technologies promise to create new standards for member convenience and will fundamentally change the credit union business model. During the past 20 years, credit union history has provided [...]

The increase in used-car lending could create a huge impact on credit unions. While credit unions have had considerable success in used-vehicle lending, their share of the market could decline significantly as used cars become extremely popular among American consumers. In fact, members of many credit unions are already venturing into the used-car lending business to take advantage of the trend. However, credit unions in general are showing some reluctance toward used-car leasing despite the threat of increased competition., Used-vehicle lending has been the 'golden goose' in credit union loan portfolios for several years. In 1997, used-car loans ranked as the No. 1 loan growth area, increasing 20%, according [...]

Retirement options have become even more vital to the relationship between credit unions and their members in light of the fact that an increasing number of Americans are experiencing problems in retirement planning. The future financial security of retirees, baby boomers, and generation Xers need to be addressed by credit unions not only as a kind of service to help members but also as an opportunity for profit. Providing retirement and investment products not only strengthens the bond between members and credit unions, it can also solidify the latter's position in a competitive market., The story is in the demographics. Demographics show retirement planning, saving, and investing are critical for members and the credit unions that serve them. The nation's 76 million baby boomers [...]

The interactive technology services given by credit unions to their members require a technology infrastructure that will support their applications. Factors influencing the development of interactive service programs are reliability, cost-effectiveness and ease of use while the criteria needed for the open information systems are scalability, portability and compatibility with other applications and systems. Microsoft's Open Financial Exchange is the recommended open system standard in data transmission between client and server., If you had to pick one buzzword that defines technology in the 1990s, it's probably 'interactive.' For credit unions, interactive technologies are key to responding to member demands for faster, [...]

An increasing number of credit unions are entering the home-banking business. Those institutions interested in this business should involve their marketing departments in each phase of the project. Starting a home banking operation requires research to determine whether going into this business is an appropriate course of action for the credit union. It also requires identifying the target market, selecting vendors of home-banking solutions, training personnel and implementing the roll-out plans.

Credit unions have increased used-car loan applications from members by following several strategies. Point-of-purchase lending allows unions to offer lower rates to members due to preapproved terms with car dealers. Affordable financing is also made available through the 100% financing of the car's retail value. Some credit unions provide Web sites wherein loan applications can be filled out., A credit union member finds that dream car, but there's a catch: It costs $20,000. To avoid high monthly payments, the member decides to buy a late-model used-car instead and [...]

The automated teller machine (ATM) system of the San Antonio Federal Credit Union makes the company conveniently deliver services in a cost-effective manner. The credit union plans to expand its 80-unit ATM network in 1996 in order to reach areas without any branches but with large concentrations of members. Members using the ATM can make deposit transactions, purchase traveler's checks and access information about their accounts., As the financial services industry faces an exploding technological revolution and copes with the challenges of increasingly limited financial and human resources, many credit unions must make choices about which [...]

Credit unions can realize opportunities in student all-purpose cards used in colleges and universities. Students use these cards to buy books, loan library books, enter dormitories, pay for meals and use vending machines. The all-purpose card system can reduce costs, improve efficiency and anticipate future needs. Financial institutions are tapped to provide support for installing and maintaining campus card systems. Credit unions serving campuses can make exclusive arrangements with the financial institutions., All-purpose cards, or one-cards, as they are sometimes called, are creating new opportunities for credit unions working with college campuses and students. Already, students on some campuses are using a [...]

The point-of-purchase lending program of The Golden 1 Credit Union has increased the number of auto loans availed by members, 38% of which originated from car dealers. The car dealers are linked to the credit union in an automated system for processing auto loans. The success of the program is attributed to the convenience offered to members. The development of the program took a total of 30 days which started from assessing the credit union's need for the system up to the monitoring of the program., Most people don't plan ahead to buy a car. Impulse buys during the weekend account for 70% of vehicle sales, says Automotive News. Most times, dealers pressure consumers to make [...]

Credit unions should develop their debit card capabilities and share draft programs since these programs will strengthen the role of credit unions as the primary financial institutions of their members. Debit cards are classified as the basic ATM cards, ATM cards with point-of-sale capacities and offline debit cards. Studies indicate that as of 1993, about 29.5% of credit unions provided ATM cards while 39.1% owned ATMs. Among the important measures of debit card marketing success are percentages in average share draft penetration and debit card activation rates., Debit cards may be one of the fastest growing financial services today - witness the growth of the two national offline products, Visa check card and MasterCard's MasterMoney. But although [...]

The periodical Credit Union Executive studied the credit card usage habits of credit union members by interviewing some 300 members selected nationwide from Dec. 1994 to Jan. 1995. Among the major findings were that members used credit cards 2.3 times a month, 60% have ATM cards and that 22% of respondents used their ATM 10 times a month. The average withdrawal of members was $65, $10 more than average consumers. Data on members' use of debit and cash cards were also presented., Both consumers and card industry insiders show a good deal of confusion when it comes to debit plastics, though most of the confusion lies in terminology. For instance, in some [...]

Credit unions evaluate credit card processors according to level of service provided, changes in turnkey operations and management of back-office functions. The selection of a card processor should be based on a credit union's present and anticipated processing needs. A matrix with which credit unions may determine major processing needs is presented. Among the datan which credit unions should elicit from processors are background information, experience, software functionality, telecommunications interface options, marketing support and cost structures., Comparison shopping is fairly easy at the grocery store. Ingredients are listed on labels, prices are marked clearly, and to compare apples to apples, you need only stroll through the [...]

The periodical Credit Union Executive conducted a survey on the usage of credit cards among credit union members. Some 300 members using major cards Visa, MasterCard and American Express were interviewed from Dec. 1994 to Jan. 1995. Among the major findings of the survey were that interest rates were important factors in choosing credit cards, members were moderate users of cards, members averaged 4.5 purchases a month valued at $100.85 per purchase and there were no significant differences in credit card use according to gender., Much has been said about how many credit cards credit union members have. But just how do they use them? What factors do your members consider when they apply for [...]

Credit unions can be assured of value when they select credit card services according to functions provided and the needs of their members. Among the functions provided are audio response, remittance proceesing and credit and collections. A survey conducted by Credit Union Executive indicated that credit union members are increasing their use of credit cards. Credit unions should therefore be aware of the latest developments in credit card services. These developments include cobranding, debit cards, prepaid and smart cards, relationship card and vertical integration of payment systems., Getting there may be half the fun, but credit card issuers like credit unions will face a dramatically changed credit and debit card world sooner rather than later. That's one [...]

Technological innovations are transforming the payment mechanisms in the credit union sector. Although teller counters are still being used by credit union members, they are increasingly favoring self-service devices and interactivity. Branches, automated teller machines, point-of-sale machines, home-banking tools and interactive kiosks are now actively being used by users. Therefore, credit unions should start offering these services as soon as possible. Debit and prepaid cards should likewise be offered because many predict these will be highly demanded instruments in the near future., Technology is rapidly changing the payment systems credit unions use. It's also affecting the ways members do business with their credit unions. Members still step up to the teller counter, [...]

Credit unions can now enter the home-banking market with the help of new electronic funds transfer systems. Unlike in the 1980s, when the concept of home banking was met with consumer indifference, this additional service is now being welcomed by a market hungry for ways to obtain easier access to funds. Electronic devices that may be used in home-banking programs are telephones, personal computers, interactive television and personal, portable communicators. The main challenge for credit unions wishing to enter this market is searching for and working with partners outside the financial services sector., Developments in electronic funds transfer - especially the revived idea of home banking via telephone, television, or personal computer (PC) - promise to create one of the greatest new markets [...]

Debit cards are among the services credit unions will introduce from 1994 through 1996. Only 12% of the credit unions surveyed offer debit cards, but 22% intend to have their debit card programs in place between 1994 to 1996. The trend towards debit cards is pushed by members wanting to have greater access to cash. Debit cards reduce expanded working hours and the risk of putting more cash in teller drawers., Born before their time in the 1970s, debit cards have new life in the plastic-loving 1990s. Industry watchdogs marked the day two years ago when two national point-of-sale (POS) networks [...]

Credit unions can gain more profits in auto leasing than in auto lending. Aside from being an alternate means of financing, leasing benefits members fond of trading vehicles frequently. Members can also lease a more expensive vehicle than they can afford to buy. Furthermore, auto leasing provides better monthly cash flow than a purchase. With all these merits, credit unions should opt for auto leasing than auto lending., In the past, credit unions struggled to offer leasing programs to prevent an exodus of members' auto loan business to manufacturers and other, independent leasing companies. But today, member/market sensitive [...]

Community development credit unions (CDCUs) can improve their mortgage products for low-income and minority borrowers and still be free of financial risks. CDCUs must avoid overrelying on credit history and on shadow underwriting. Moreover, they must make escrow options available for repairs and look at net worth for self-employed borrowers. They must also relax downpayment standards and debt ratios. It is likewise important that CDCUs negotiate to reduce fees that add to closing costs., How would you evaluate the following two credit applicants? * A couple, making $90,000 a year and having many active credit sources, applies for a luxury boat loan. * A [...]

Debt ratios have many definitions, but only one is used when evaluating loans. Debt ratios allow a credit union to evaluate a loan application more effectively. A typical loan evaluation sheet should include division of secured and unsecured debt in a list of payments, gross income, unsecured loan comparisons, unsecured loan ratios, payments ratio, primary debt ratio and cash flow analysis. Debt ratio of 20% is very promising for loan repayment., In the early 1970s, I wrote an article discussing the relationship between the total consumer debt and annual gross income--the debt ratio. The debt ratio was the 'rule of thumb' [...]

Evaluating the service performance of mortgage institution involves making cost studies of servicing including the profits gained from servicing and expenses from processing and personnel. Service fees vary according to the type of mortgage, a large portion of which is comprised of residential loans. Additional servicing expenses may be incurred by provisions for losses, amortized costs and occupany rates. Productivity can be measured by charting the loans serviced per employee., Servicing is the bread and butter of mortgage banking, the key to success and profit for mortgage banking companies. But how can a credit union measure its servicing performance? The [...]

The practice of offering mortgage loans is becoming prevalent among credit unions in the US. Doing so, however, involves the use of asset/liability management (ALM) techniques to handle their mortgage portfolios. ALM entails the formulation of written policies to protect against interest-rate risk and credit risk while offering a mix of mortgages. They may also enter the secondary mortgage market and offer special payment terms., Listen to credit unions attending any real estate lending seminar, and you won't hear, 'Should we offer real estate loans?' Instead, you'll hear three questions: * Is it better to [...]

For most low- and middle-income households, managing the family finances is a matter of matching income to debts, with any surplus or savings as a bonus. Their interactions with financial [...]

Low-income households--those households with $20,000 annual income or less--have simpler financial needs than do middle-income and affluent households. Like other income groups, low-income households need checking and savings accounts and [...]

Five years ago, one in five American families--16 million households--did not have a savings or checking account at any financial institution. The U.S. General Accounting Office, the investigative arm of [...]

The scope of services being provided by credit unions has expanded to include ventures into operations not traditionally provided by them. These C credit unions form credit union service organizations (CUSOs) to provide the new services. These new services include mortgages, operational services such as debit and card services, title companies and financial planning. The income from the new services are derived from fees while the customary income of credit unions are from spread. An explanation of the accounting and management challenges which credit unions could face in forming CUSOs is presented., Credit union finance is changing as more credit unions establish credit union service organizations (CUSOs) to venture into nontraditional operations such as mortgages, operational services(1), title companies, and financial planning. [...]

Indirect leasing offers huge business opportunities for credit unions that finance motor vehicles. The key is to select the right lease administrator based on experience, financial stability, use of information technology, training and education, vehicle dealer relations and program support, among others. It is also important to consider regulation and compliance, lease validation, insurance and end-of-lease disposition in choosing a lease administrator. When selecting prospective leases, credit unions should take into consideration simple interest, term range, loan conversion option, residual value purchase option and other critical elements., Leasing accounted for more than one-third of all personal-use vehicles financed in 1997, according to CNW Marketing/Research of Bandon, Ore. That's an impressive increase from 13.5% in 1990 and well [...]

A survey conducted by CU Direct Corp. for the California Credit Union League revealed various facts on credit union auto leasing in California. The study revealed the absence of educational programs on leasing products offered by credit unions. Moreover, it disproves a myth regarding leasing as a spur-of-the-moment decision. Various leasing strategies are available to unions. These include the provision of online services, point of purchase systems, and the offering of used-car leases., In auto leasing, experts tell you to do two things: Educate members about your program specifically and leasing in general, and know the auto lending and leasing market. Yet a [...]

Credit unions should have a mutual funds offering in view of the trend of the financial industry's move into mutual funds. Much of the monies withdrawn from the savings products are moving into mutual funds and industry experts believe that funds from other offerings will follow. If credit unions do not have mutual fund offerings, their member relations will fall drastically. Application of mutual funds may be risky since they reduce the supply of money.

Nineteen percent of low-income households--those with $20,000 or less in annual income--have a credit union member, according to a CUNA-commissioned survey of 403 low-income households conducted by CUNA's Economics and [...]

It was Sunday afternoon, and Whirlpool senior executive Adam Leonard (not his real name) found himself on the phone with his oldest son, Tom. Tom, a college student away from [...]

Strategies to Satisfy Seniors Longer life expectancies and the aging of baby boomers mean the senior market has gained enormous economic strength. While seniors (50 years or older) make up [...]

Credit unions likely will see a slowdown in both vehicle sales and credit union automobile lending this year. Auto makers sold a record 17.4 million vehicles in 2000. That came [...]

'If you don't have goals [for e-business], you're in deep trouble,' says Alex Neil, vice president of e-business for $1.2 billion asset Hudson Valley Federal Credit Union, Poughkeepsie, N.Y. With [...]

The Internet's dramatic impact on today's economy has compelled many financial institutions to move services online, investing vast sums of money into custom information technology (IT) infrastructures--the gear that runs [...]

Serving the underserved is relatively safe when your credit union approves a $3,000 personal loan with payroll deduction payments or a risk-based car loan. But suppose members need mortgages, and [...]

Americans now are accustomed to sending messages electronically to family, friends, and business associates anywhere. But when it comes to making purchases, they still favor paper checks over electronic methods. [...]

Online calculators aren't only a natural feature to offer on your World Wide Web site, but one members soon will expect. They are interactive Web-based decision-making tools that enable members [...]

Shopping Surveys TESTING MEMBER SERVICE As the financial services industry grows more competitive, you'll need to find ways to differentiate your credit union from the competition. Good service is one [...]