CUs Continue to Pursue Consumer Loan Share

Here?s a question for you ?

Do credit unions write more loans because they have grown, or do they grow because they?ve written more loans?

Might sound like a chicken-and-egg scenario, but one thing is very clear: These two variables ? credit union size and ?lending pursuit? ? are directly related.

When you look closely at a credit union?s L2A, or loan-to-asset ratio, it?s easy to spot a trend. The L2A measures what percent of a CU?s asset base is lent to the market. Traditionally, CUs have kept this number in the high-50% to low-60% range. But if you were to look at how the L2A varies by size of credit union, it?s not surprising to see how the numbers change.

Of course a credit union with $500M in assets will have more consumer loans in the market than its $50M counterpart. But its also very likely that the $500M CU is lending a larger portion of that asset base, thereby furthering its growth and membership base.

This is definitely something to think about ? and act upon ? in your local market.

And while you?re pondering your next move, you might also want to consider the fact that there are 218 credit unions with over $1B in assets, and almost 1,500 above the $100M threshold.

Dave Eckstein is a Partner in the firm ESA & Company. He specializes in highly profitable market share growth for local businesses and gets a kick out of demonstrating a declining cost of customer acquisition. He plays baseball, but isn't that Dave Eckstein.