TALLAHASSEE, Fla.-The most important lesson coming out of the recession, according to Jim Park, is that some credit unions must not forget that their lending practices got out of hand.
The president of Credit Union 24 believes that many CUs that suffered a great deal the last four years did so because their lending practices got ahead of their expertise. "It's no excuse, but that may have been forced upon them by the competition they faced."
Park hopes the recent struggles have taught many credit unions to proceed more cautiously with lending, as have many during the recession. "But they can't forget this lesson, because if history repeats itself, I think we will see a Dodd-Frank II that will be very far reaching in its rules, impacting a lot of revenue streams."
What made Park focus on lending as the key lesson, he said, is that some large banks have recently shown signs of making risky investments again. "I believe what we learned during this recession is a great lesson to hold onto-to continue to be conservative."
Park said CUs can be careful with lending and still boost portfolios by expanding into new areas, such as member business lending.