Sarah Snell Cooke, Monday, July 19
CNBC recently reported that Wells Fargo, the megabank, is shutting off all personal lines of credit, and its customers are steamed over the decision. Because the lender is shutting them off, not only do the borrowers lose their lines of credit, but it will also negatively affect their credit scores.
The announcement came just months after Wells Fargo stopped offering new home equity lines of credit, and only a couple of years after the scandal of systemic fake account openings.
Credit unions can truly leverage this opportunity to demonstrate your commitment to serving these everyday consumers because it is obvious this megabank isn’t interested. Personal loans and credit cards are critical financial tools for many in your credit union’s community to manage surprise expenses. The more people we can save from payday lenders with small lines of credit or credit cards, the sooner we can build more economically stable and viable communities.
Credit unions have not performed very well when it comes to credit cards. While growth in credit card lending among all issuers remained flat in April of this year, credit unions decreased 7%. While auto loans are valuable, credit unions must better diversify income streams. Yes, credit cards are a competitive field, but partners offering merchant-paid rewards – or even cash rewards which are consumers’ favorite – can help your portfolio tremendously. Here’s how:
Credit unions have a golden opportunity to show consumers their offerings and demonstrate their philosophy for greater relevance. Be sure that your credit union is taking advantage of the opportunities presented to us, courtesy of the megabanks, as well as others for a more well-rounded loan portfolio and happier members.