MADISON, Wis. — The myriad of reasons for credit unions wanting to offer member business loans are mainly tied to member demand.
Findings from CUNA's 2007 Business Services Survey found that 57% of credit unions surveyed said the No. 1 reason for starting a member business lending program was to be able to offer more services to members. Fifty-four percent said members had expressed interest in such a program followed by 48% of CUs that said they saw the entry as a way to grow loans.
"Members are saying 'why can't I bring my business [to the credit union]," said Doug Benzine, vice president of CUNA Research and Advisory Services, who shared some of the survey findings at a CUNA Webcast last Thursday. "They're tired of being merged out [through bank consolidation]."
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Other reasons credit unions gave for starting a member business lending program were a new source of net interest income (21%), core deposit growth (20%), new sources of fee income (5%) and interestingly, only 2% said it was a way to provide new capital for the community.
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