As a way to boost Arizona’s economy, a Phoenix credit union executive penned an op-ed touting credit union loans as one way to make it happen.
In an Aug. 5 Phoenix Business Journal opinion, Paul Stull, senior vice president of strategy and brand at the $1.3 billion Arizona State Credit Union, wrote on how securing a loan with the state’s financial institutions can help communities thrive. Specifically, credit unions can reach people of “ordinary means loans with lower interest rates than those offered by banking institutions.”
“Credit unions do not impact only their members. Their presence forces bank pricing to be more consumer-friendly than it would be otherwise,” Stull wrote.
Arizona State CU said it loaned more than $40 million to the Greater Phoenix area in the first half of 2011. Stull said statistics from the Home Mortgage Disclosure Act show lower-income and minority borrowers in the market for a mortgage are substantially more likely to be approved for a loan at a credit union.
“The Government Accountability Office report GAO-07-29 confirms that credit union pricing usually is more favorable than bank pricing, even though each of the nation’s four largest banking entities is larger than the entire credit union system,” Stull said.
He acknowledged that while credit unions have not been immune to the effects of the economic downturn, they are still lending.
“It may be difficult to find credit unions with the same lending flexibility that existed several years ago, but they still are actively lending. In fact, many consumers and businesses unable to obtain loans from banks turn to credit unions to fill this void,” Stull wrote.
“Credit unions are able to lend because their asset quality and capital have remained high in the face of challenges arising from the financial system crisis,” he wrote.