Special Holiday Loans
By Joyce Moed, Reporter

FORT LAUDERDALE, Fla.- Although credit unions vary on what type of special holiday loans they are offering, one trend seems to be common among all CUs–their members are definitely borrowing.

City County Credit Union here is offering an unsecured holiday loan for up to $3,000 at 12.99% for a 12-month term.

"We have booked over $1 million this year and we’re ahead of last year’s volume at this same point," said Lloyd Gill, EVP/chief lending officer at the 40,000-member CU, and vice chair of the CUNA Lending Council.

City County CU’s holiday loan is promoted through a statement stuffer, newsletter article, branch posters and the credit union’s own website.

"We also pre-approve members who received a holiday loan last year if they repaid as agreed," Gill added.

In addition to holiday loans, Gill said that City County CU also promotes credit cards this time of year.

"We have also seen a seasonal increase in credit card applications," Gill said. "Auto lending is slow right now, but that is also seasonal at our credit union."

After the holidays, City County CU continues to offer the holiday loan–until Jan. 31, "in case members want to consolidate high-rate store credit card debt," Gill said. The $270 million in assets CU will also be promoting a Visa balance transfer rate of 6.99% for the life of the balance transfer, and will also have a home equity promotion centered around debt consolidation.
"I think home equity debt consolidations loans will be popular in the first part of 2008 at our credit union," Gill said.

Greylock Federal Credit Union in Pittsfield, Mass., is seeing a mix of auto, personal, Visa, mortgage and home equity loans during the holiday season, said Christopher Moon, VP/manager of consumer loans for the 63,000-member CU.

"Seasonally we are seeing more personal loans for debt consolidations and holiday spending," Moon said.

Greylock FCU, which has $966 million in assets, is promoting its loans through newspaper and radio, in addition to home-buying seminars, in-branch signage and local auto dealerships.
After the holidays, Greylock FCU will be promoting auto loans, and mortgage/home equity loans.
"In the northeast, mortgages begin to become more popular in April when the weather improves," Moon said.

"Each year we use President’s Day weekend as a kickoff for the auto-buying season," Moon continued. "We typically have a giveaway or special rate offering advertised through in-branch signage, newspaper, radio and local auto dealerships."

Another seasonally popular loan for Greylock FCU is its fuel loan, Moon said, which is for the purchase of approximately one year of heating fuel for home use.

"Our goal is to assist members by spreading out their high spikes of winter heating costs over a 10-month period," Moon said. "The maximum loan is for $3,000 and the interest rate is 5%. We advertise this with in-branch signage, newspaper and notices to the local fuel providers."
Angela Halsey, director of marketing and business development for Montrose Federal Credit Union in Montrose, Colo., said that members are borrowing "but the end-of-the-month number for December will be the tell all of the market."

Dana Rawlings, chief operations officer for Smart Financial Credit Union in Houston, Texas, said they are seeing mainly signature holiday loans and lines of credit this season.

"We are promoting these loans to existing membership via retail in lobbies, newsletters and the website," she said.

After the holidays, she expects the 74,000-member credit union to have an increase in debt-consolidation loans. She said the credit union will also be promoting credit cards and auto loans at the end of the first quarter.

Montrose FCU has seen an influx in its credit cards well as its signature loans, Halsey said.
"We started our holiday lending in early November," she said. "We really tried to talk about the credit union’s great signature loan rates as well as our always fixed rates on our credit cards that are offered. In addition, our practice is to always see if collateral can be a factor. We have open-ended lending so we encourage our members to see if there is any equity in their vehicles that they can use to their advantage."

Halsey said that more than one-fifth of the CU’s 5,800 members have a vehicle loan there, which is about 30% of their loan portfolio. The CU has about $64 million in assets.

Montrose FCU began promoting its holiday loans by sending out letters in October, which proved a fair return, Halsey said.

"We increased our signature loans by about 20%," she said.

Signature loans are the loans encouraged most during the holiday season at Montrose FCU, Halsey said.

"This helps people get out of the holiday pinch but gives them a timeframe of repayment which credit cards don’t," she said. "We didn’t do a special promotion by any means. Who can get a signature loan for 9% these days? Anyone who is a member of MFCU and we’re very proud of that."

After the holidays pass, Montrose FCU expects to see debt-consolidation loans in demand.
"We can expect to see a lot of movement on the HELOC and mortgage refinance side," Halsey said. "Around here the normal patterns are if somebody didn’t get a winter toy as a present for Christmas, they go out and by one anyways. We have a great relationship with the local ATV, snowmobile dealers and they send business our way during the beginning of the year."
So for after the holiday season, Montrose will have debt consolidation loans as part of their marketing pieces, but Halsey said they will also be reaching out to "the people who still like to spend after the holidays."

"I believe it is time to talk about refinancing, whether it be home, vehicle or credit card," she said. "I want to be able to finance that one thing that wasn’t under the tree. I don’t believe in always having a special to promote your products and services. If you are doing right by your members, they have your special every day. My advertising will incorporate diamond rings, new trucks, snowmobiles, Ipods, Xbox and Wii–the things that everybody wants in life."

www.citycountycu.org
www.greylock.org
www.mfcu.org
www.smartcu.org