Families, Low Income Borrowers Benefit From CUs, League Says
Credit unions have benefited lower income and families especially, according to the Wisconsin Credit Union League.
The League said lower income and minority borrowers have been more likely to have a home loan approved by a credit union than by a ban k or other lender, based on data available under the Home Mortgage Disclosure Act.
The League said that in 2009, 72.2% of lower income borrowers had mortgage applications approved at credit unions compared to banks and other lenders who only approved 65.5% of lower income applications. Minority borrowers received a mortgage from a credit union 78% of the time compared only 59.2% of the time from a bank or other lender.
"Credit unions continue to outperform other lenders in mortgages to financially underserved groups because of their unique member-ownership structure," said Brett Thompson, CEO of the Wisconsin Credit Union League. "Because credit unions exist to serve their member owners, as opposed to chasing profits, credit unions can make mortgage decisions based primarily on members' needs. So credit unions will make smaller loans on more modest homes. They're also more accessible to low-income and minority borrowers."
Thompson and the League also praised credit union products and services that it said particularly benefited economically struggling families. Among the products and services the League listed were reconfigured loan terms to help families affected by job losses or health problems make ends meet; consolidated debt at lower rates for consumers when other lenders applied massive rate hikes; free financial counseling or refinancing to prevent home foreclosures and rescuing consumers from payday loan traps that had overwhelmed them.