Despite three Federal Reserve interest rate hikes in the past year and another two on the horizon, several credit unions are sticking to their lending strategies.
“It’s definitely had an impact on us and our rates,” Ethan Nelson, vice president of lending at Oregon Community Credit Union, told Auto Finance News. Even so, OCCU plans to continue originating auto loans as before, he said.
The Fed’s most recent action, in March, increased benchmark interest rates to a range of 1.5% to 1.75%. “The potential for [more] rate increases has, not by itself, prompted us to look at our vehicle lending strategies,” said Mark Coburn, senior vice president of lending development at State Employees’ Credit Union of North Carolina. “More so, [there] has been a general slowdown in the auto market as a whole.”
Oregon Community CU will keep tabs on the sector before making any changes, Nelson said, a sentiment that was echoed by Joe Pendergast, vice president of consumer lending at Navy Federal Credit Union. “We continue to always monitor what our competitors are doing,” he said, adding that, so far, higher rates have not affected originations.