SCOTTSDALE, Ariz.-Don't give up on those members with less-than-perfect credit-they could be the key to loan growth in 2013.

"There is so much competition for the A+ and the A loans that the rates have been bit down, so they're marginally profitable at best," said Mike Kohl, president and CEO of Kohl Advisory Group. "The real opportunity is probably in the B and C loans, sometimes even D loans, if they're properly priced."

Kohl stressed that loan demand will continue to rise as the nation emerges from recession and the economy turns around, and CUs should position themselves to be top of mind with members-even those whose credit isn't stellar.

"When your members think of someone to get a loan from, you want them to think of you," said Kohl. "Having them aware that you exist when they need a loan and that they believe they're going to get a good deal form you is key. Having said that, there is greater potential if you know what you're doing in the middle tiers; those folks are happy to get a loan when you approve them."

The executive also recommended that CUs look continue looking for ways to diversify their loan portfolios in 2013, such as pushing HELOCs in areas where the real estate market has stabilized, and he recommended RV lending as a way to boost margins.

"They can be profitable, because their losses can be about the same as a regular vehicle loan and you can get 1% or 2% more for them."

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