Without the proper equipment, a rock climber's chances of tumbling off the side of a cliff increase. Likewise, the current economic climate is pushing some lenders and financial institutions to the edge of the metaphorical cliff. Credit unions are at a crux: manage their risk wisely with solid, sound practices to best serve members or suffer the consequences with increased repossessions.

An area of particular focus among lenders is automobile loans. Even though gas prices have dropped recently, rapid devaluation of low-mileage vehicles continues and record rates of negative equity for new-car buyers have contributed to a sense of crisis that's palpable.

Taking a look at our economic environment is a little disconcerting, to say the least. Due to sagging consumer confidence and retail production curbs, a domino effect has spread into job layoffs, which puts pressure on homeowners. With nearly one in six homeowners under water on their mortgages, according to WSJ.com/Moody's Economy.com, it's no surprise to learn that auto loan delinquency is on the rise. As a matter of fact, we've found a 50% increase between the end of March 2007 to end of June 2008 in the amount of all delinquent credit union loans, from mortgages to vehicle loans and everything in between.