Management Quality

Claire Dickey, in a June 20, 2019 article in bankrate.com, reports that more than half of Americans will pay for their children’s summer care with credit card debt. Most of those will carry the debt into coming months.

Carrying over credit card debt for services already consumed can lead to financial strains as debt accumulates. Credit unions need to have management tools in place that track each borrower for signs of financial stress that could lead to loan delinquency or defaults.

Jim DuPlessis, in a June 11, 2019 article in cutimes.com, reports that credit unions held $61.8 billion in credit card debt in April, 2019, up 8.3% from a year earlier, according to a Fed report.

Increasing credit card portfolios may be a source of increasing loan revenues, but credit card debt has its own unique risks and needs to carefully managed.

Sally Bakewell and Thomas Beardsworth, in a June 11, 2019 article in bloomberg.com, write that regulators are becoming more concerned over institutions that are loading up on higher risk loans.

Credit unions can look for more examiner scrutiny relating to their lending practices and loan portfolios.

Jim DuPlessis, in a June 04, 2019 article in cutimes.com, reports that credit union loan growth peaked two years ago.

Credit unions should be strategizing how they plan to keep their loan portfolios growing to avoid diminishing loan revenues in coming years. There are methods to profitably reach deeper into the consumer loan market and lend to borrowers in lower credit grades.

An article in plansponsor.com, written by John Manganaro, reports that in a Bankrate.com survey, Americans regret the lack of savings they have set aside for emergencies and retirement.

Providing education to members to help them meet their financial goals should be part of every credit union’s business. It is important to make sure there are clear objectives to providing any and every service.

Charisse Jones, in a May 29, 2019 USA Today article, reports that college students are not optimistic they will ever be able to pay off their student loans.

Many young consumers are facing more financial stress than previous generations. Credit unions need to be managing the risk in their loan portfolios with effective tools that price loans for risk and that keep managers aware of the growing risk in existing loan portfolios.

CBSnews.com reports in a May 1, 2019 article that many senior citizens are burdened with almost insurmountable student loan debt.

"The fastest growing segment of student loan borrowers are actually older Americans," said Seth Frotman, a student debt expert who used to work at the CFPB. This should be a major concern for financial institutions.

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