Credit Unions Can’t Be Late! How Automated Prescreen Marketing Can Accelerate Growth Amid Mixed Performance Signals

By Devon Kinkead

The latest credit union performance data paints a picture of an industry in transition. While the first quarter of 2025 showed members building savings and managing debt more responsibly, it also revealed a widening gap between high-performing institutions and those struggling to maintain growth. For credit unions seeking to bridge this divide, automated prescreen marketing technology offers a powerful solution to capture market share and deepen member relationships in an increasingly competitive landscape.

The Performance Paradox: Strong Fundamentals, Uneven Growth

According to recent Trendwatch data from Callahan & Associates, credit unions face a curious paradox. On one hand, share growth continues to outpace the national personal savings rate, and net interest margins have improved substantially. Members are demonstrating healthier financial behaviors, with delinquency rates bucking recent trends and improving slightly in Q1 2025, while more members are moving money into lower-term deposits and paying down debt.

Yet beneath these positive indicators lies a concerning trend: the gap between mean and median loan growth has widened dramatically. While mean loan growth reached 3.4% annually, median growth dropped to just 0.34%. This disparity suggests that larger credit unions are dominating industry lending, leaving smaller institutions struggling to compete.

The implications are clear—credit unions that cannot modernize their lending approaches risk being left behind in an increasingly bifurcated market.

The Untapped Opportunity: HELOC Consolidation

While credit unions grapple with uneven growth patterns, a massive opportunity sits largely untapped. With 61% of homeowners locked into mortgage rates of 6% or lower and equally reluctant to sell their homes, traditional mortgage refinancing has become less attractive. Meanwhile, home equity has climbed to over 50%, creating a $25.6 trillion pool of accessible capital that members could tap for debt consolidation—particularly important given the $1.2 trillion in high-interest credit card debt weighing on consumers.

The Technology Gap: Why Traditional Approaches Fall Short

Despite credit unions’ historic strength in lending—having achieved record market share in auto finance (20.2%) and non-revolving consumer loans (13.2%) in 2018—many institutions struggle to capitalize on refinancing opportunities due to outdated marketing technology approaches.

Traditional prescreen marketing campaigns, while proven effective, have been prohibitively complex and expensive for many credit unions. The process typically involves:

• Multiple rounds of communication with credit bureaus
• Labor-intensive campaign development
• Complex compliance reviews under FCRA and UDAAP regulations
• Lengthy timelines that can stretch 5+ weeks

This complexity has left prescreen marketing primarily in the hands of large banks and fintechs, creating a competitive disadvantage for community-focused credit unions. Online lenders like Figure and Rocket Mortgage are capitalizing on this gap, offering approval in minutes versus the 21-day industry average and closing in one week versus 36 day industry timelines.

The Automated Solution: Leveling the Playing Field

This is where automated prescreen technology fundamentally changes the game. By leveraging AI, machine learning, and big data analytics, platforms like Micronotes’ Automated Prescreen transform what was once a costly, complex process into a streamlined, profitable growth engine.

The results speak for themselves. Credit unions implementing automated prescreen typically see:

• Conversion rate improvements with win-rate visibility
• Net negative acquisition costs (the income from new loans exceeds campaign costs)
• Dramatically reduced labor requirements
• Consistent FCRA compliance through automated templates

Strategic Alignment: Furthering the Credit Union Mission

Automated prescreen marketing doesn’t just drive growth—it advances the core mission of credit unions. By continuously monitoring member financial situations and proactively offering better rates, credit unions can:

Improve Financial Health: Automatically identify members paying excessive interest rates and offer meaningful savings through refinancing opportunities.

Build Deeper Relationships: Demonstrate ongoing care for member financial wellbeing through personalized, timely offers that address specific needs.

Strengthen Communities: Help members save money through lower interest rates, increasing disposable income that flows back into local economies.

Extend Financial Inclusion: Reach underserved populations with affordable credit options, using data-driven insights to identify those who would benefit most.

The Path Forward: Three Critical Actions for Credit Union Leaders

As the performance gap between credit unions widens, institutions must act decisively to remain competitive. Based on the convergence of market trends and technological capabilities, here are three essential steps:

1. Embrace Data-Driven Precision

Move beyond broad marketing campaigns to hyper-personalized offers. Use automated prescreen technology to:

• Target members with specific debt profiles
• Show exact savings amounts in marketing materials
• Focus on the 29% of homeowners with only a first mortgage and over 20% equity

2. Accelerate Digital Transformation

With online lenders setting new standards for speed and convenience, credit unions must:

• Implement AI-powered underwriting for instant approvals
• Adopt automated valuation models to eliminate appraisal delays
• Create mobile-optimized application experiences with pre-filled data
• Optimize campaign win-rates with every campaign

3. Scale Intelligently

Start with automated prescreen for existing members to refine your approach, then expand to market acquisition. The 17-week application window for prescreen campaigns provides ample time to manage volume while maintaining service quality.

The Competitive Imperative

The credit union industry stands at a critical juncture. While strong fundamentals provide a solid foundation, the widening performance gap signals that traditional approaches are no longer sufficient. Credit unions that continue relying on manual processes and broad-based marketing will find themselves increasingly marginalized as larger institutions and fintechs capture market share.

However, those that embrace automated prescreen marketing can flip the script. By combining the trust and member focus that define credit unions with the speed and precision of modern technology, these institutions can capture their fair share of the burgeoning refinancing opportunity while deepening member relationships.

Conclusion: From Laggard to Leader

The latest performance data makes one thing clear: credit unions cannot afford to wait. With median loan growth at just 0.34% and competition intensifying from both traditional banks and digital disruptors, the time for incremental change and half-measures has passed.

Automated prescreen marketing represents more than just a technology upgrade—it’s a strategic imperative for credit unions serious about growth. By dramatically reducing the cost and complexity of targeted lending campaigns while improving conversion rates and member satisfaction, this technology enables credit unions of all sizes to compete effectively in today’s market.

The question isn’t whether to adopt automated prescreen marketing, but how quickly credit unions can implement it. Those that act now will be positioned to capture market share, deepen member relationships, and fulfill their mission of improving financial lives by programmatically lowering borrowing costs. Those that hesitate risk becoming statistics in the next Trendwatch report—another institution left behind as the industry consolidates around those bold enough to embrace change.

For credit unions ready to transform their lending performance, the path forward is clear: automate, personalize, and grow. The technology exists, the opportunity is massive, and the mission demands it. The only question remaining is: will your credit union be among the leaders or the laggards in the next chapter of the credit union story? Start your journey with a free near-branch growth analysis here. You can’t afford to be late.