DES MOINES, Iowa (3/24/08)--Iowa's credit unions are preparing for how the 2008 economy will affect their members and the credit union. Iowa's credit unions and banks have mostly sidestepped the subprime loan crisis, but are now preparing for a falling-interest-rate environment, reported a survey by the Des Moines Sunday Register
(March 16). Nearly 48% of credit unions and banks in the state surveyed expect lending conditions to become more challenging, while 27% of the 33 credit unions surveyed expect a "good to excellent 2008. Credit unions are offering programs to help their members and developing strategies to grow in a challenging economy. Ascentra CU, based in Bettendorf, has experienced members asking for help with home loans they took out elsewhere and were having trouble repaying. If a home still has equity, the loans can be remodified, the credit union told the newspaper. The Iowa Credit Union League has several initiatives to help credit unions have a good year in 2008, Pat Jury, league president/CEO, told News Now
. "In 2007, the league formed its Credit Union Growth Commission, comprised of 23 Iowa credit union leaders, to review trends in the industry and market research related to credit union growth," he said. The commission will offer recommendations for credit union growth strategies. "Earlier this year, the commission identified five substantive issues critical to the discussion of credit union growth and vitality," Jury said. The prioritized concepts are:
* Back office support credit union service organization (CUSO); * Human resources support CUSO; * Marketing support CUSO; * Mobile banking; and * Virtual bank.
The league "will continue to research these five areas and develop business plans for these models. While the Growth Commission has accomplished a great deal over the past several months, this is just the first phase to achieving credit union growth in Iowa," Jury said. A second initiative is making financial education a top priority in the state. The league's governmental affairs team has worked with both the public and private sectors in support of Senate File 2216, which would require school districts to implement a core curriculum into current courses that include the teaching of financial literacy. This legislation has passed through the Senate and is expected to be debated in the House Education Committee this week, the league said. In a third initiative, the Iowa Credit Union Foundation, with Coopera Consulting, will soon launch the Credit Union Family Partnership Program, an individual development account (IDA) program in which credit unions offer a savings account to qualified new and existing members and match the amount saved, dollar for dollar. "The money saved can be used toward closing costs and down payment on a first home; to start or expand a small business; to pay for post-secondary education or job training, or to purchase a vehicle to get to work," Jury said. IDAs help low-income families build positive net worth and improve their financial stability. The program is available to those who receive Iowa's Family Investment Program, are eligible for the Earned Income Tax Credit, or whose income is at or below 200% of the federal poverty limit. The foundation program is possible thanks to a $250,000 anonymous donation and a $10,000 grant from Prairie Meadows in Central Iowa. The foundation's Executive Committee will announce credit union participants in the next few weeks, Jury said.