Nearly all credit unions closed branches, leveraging drive-throughs where applicable to continue serving members through the coronavirus pandemic. Members also were turning to alternate channels such as online and mobile banking. Many other businesses that support credit unions, such as car dealerships, were forced to shut down and had real impacts on their business and credit unions. We wanted to see how the pandemic has really affected credit unions’ loan business.
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Initially, Leaders CU didn’t see quite the drop relative to other credit unions. On the indirect side, Spencer explained, the credit union is seeing an actual increase in applications compared to the same period last year. He said this may be because the impact in Tennessee hasn’t been as dramatic as other states, and indirect outlets have remained open.
Kevin also reported an almost 50% drop in loans, and as a result, partnered with Open Lending and Auto Pay to help the credit union and its members through the crisis. These partnerships were implemented within two business days and have been ramping up to help displace some of the loans that would otherwise be lost.
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Although auto lending – credit unions’ bread and butter – has clearly been negatively affected, lenders are leveraging other technologies to drive business. The success of these convenient, digital lending programs has helped ease their concerns and continue operations. All in all, the adaptations of digital solutions and collaborating with business partners, like Open Lending, lay the groundwork for continued success through digital transformation that will serve lenders well in the long run.
If there is a silver lining to the coronavirus pandemic, one will certainly be that it has forced all types of businesses to face the need for better accessibility through online channels and partnerships. Some of the moves credit unions have made will help them come out the other side of this terrible scenario even stronger and with better member relationships, because their credit union was there for them when they needed it most.
Open Lending has taken the approach of continuing to serve our clients in all ways possible, so credit unions can continue to focus on their members. Credit unions have adapted their lending criteria to the new norm for existing and potential members. While some lenders have tightened their belts, credit unions are using this time to tighten their business strategies, invest in new, long-term initiatives and grow member relationships that can last a lifetime. The brilliance of credit unions’ business model is that we work to build the 100-year business rather than appeasing demands for short-term returns.