By Steve Kelley, BCI vice president for Branding Services
I checked my mail the other day and found something that got me a little excited: a postcard from my credit union advertising a great low rate on auto loans, inviting me to call in or click in to apply!
Now, the truth is that I’m not in the market for a new vehicle, nor do I have the appetite right now to add to my debt load. But the postcard was still a welcome sight because it seemed like a sign that things might be heading back toward normal.
I live in Arizona, and this credit union is like most here – they’ve seen substantial losses in the last couple of years as their members have struggled (some harder than others) to repay loans. As a result, they’ve really had to change the way they make (and market) loans. So, instead of the pre-approved offers I used to see in my mailbox a couple of times a year, things got really quiet on the loan marketing front. They were still making loans, but mostly just to the people who sought them out (and had high credit scores and big down payments).
The trouble with that approach (which they had no choice but to take) was that it made it a bit harder for them to bring in the revenue they needed to offset the losses and get their capital back to a more comfortable level. Credit unions are in the business of making loans, and when they can’t do that, it’s a little tough to make money.
So, does this postcard in my mailbox mean that everything is fine at my credit union now, and that things will go back to exactly the way they used to be? Probably not, nor do I think that would be for the best. There were clearly some things that needed to change, and the world just isn’t the same today as it was before the economy melted down. Underwriting standards probably need to be tighter than they used to be, and maybe the idea to get a loan to buy a new car should come from me and not from my credit union. And looking around, the economy is still nowhere near where we want it to be.
But all that said, I’m still glad I got the postcard, because it tells me that things might be loosening up a little, and I believe that has to happen for us to get this economic engine running again. And then, maybe I will be in the market for a new car!