Now, this is not an article reprinted from the American Journalof Medicine, but a serious question for the credit union systemconcerning mortgage lending.

Members of the American Credit Union Mortgage Association(ACUMA) take mortgage lending VERY seriously. Evidently, we seem torepresent the Great Silent Minority of the credit union world andthat may well prove to be the last great opportunity missed by this“movement” before it creaks into old age and/or oblivion.

Yes, many Americans are facing real problems with the reset oftheir mortgage loan rates from ARM, interest only and other exoticproducts originated some four or five years ago. But the point thatseems to escape many of our fellow credit union executives is thatfor the most part, credit unions did NOT originate these loans andwe have little if any risk as a result of the now infamous“subprime” loan crisis in America. So, why isn't the credit unionsystem knocking our lights out to come to the rescue of theseAmericans?

Again, where is the blockage? Is it credit union management? Itis true that upwards of 70% of all credit unions offer NO mortgageloans at all? How is this possible? Do you really believe you areserving the needs of your members and more importantly, consumerswho may become members if you provide a viable reason for them todo so? How relevant can a credit union be today if it doesn't offermortgage loans?

Is it the volunteers? I realize many volunteers do not havemortgage loans. If that is the case, should this impede the creditunion's decision to offer mortgage loans? Is it the regulators?Some say auditors and examiners have mixed feelings aboutoriginating mortgage loans. I don't hear that rhetoric coming fromNCUA. In my personal experience in the credit union system, therealways seem to be funds to cover charge-offs for consumer loans,but limited funds and resources to originate mortgage loans. Why isthat?

While many in the real estate lending arena are taking theirlumps for past sins, we in the credit union system have one of thegreatest opportunities in decades. Statistics speak for themselves.Membership growth has been stagnant in recent years and much hasbeen written about shrinking results in ROA and ROI.

Our organization exists not to benefit from the success ofcredit unions nor to compete with them…we exist to fight the uphillbattle of informing our credit union colleagues that now is thetime to act. Just last week, as the stock market was reeling andthe Dow dropped like a lead balloon, the Sunday and Monday morningtalk shows each had a segment (or several) with analysts andpundits screaming of the buying opportunity the drop represented.So I have to ask, why is the glass always half-full for CU mortgageopportunities? If we make good loans, if we make our membersunderstand what loan is suitable for them and if they qualify andare made knowledgeable about their obligations, what can we lose?Or, to put a fine point on it, how can we be put underwater?

The Big Numbers Game

This is more than a mathematical exercise in who can have thebest looking financial statements. This is a time to get back tobasics and what I learned when I joined the credit union system in1975, “people helping people!” Do you remember that and can yourelate to it as more than just a catch phrase? We took it veryseriously back then, but now it seems to be missing in action muchof the time. Believe me, I've heard all of the excuses, and in factmany of these excuses are similar, if not identical to the sameexcuses I heard 15 years ago while serving the CUSO niche. “Wedon't understand the business; human resources are too costly andin many cases are not compatible with our compensation policies;competition is too intense for us to make a dent…” Sound familiar?It goes on and on…I recall similar issues about ATMs back in the70s as well. Somehow we managed to overcome those obstacles andhave one of the better products for our members in that area. So Iask the question again…where is the blockage? I wish someone couldprovide me with a meaningful answer because I am very frustratedand worry about the future for the credit union system.

At a presentation several months ago, a young CU staffer came upto me after one of my rants, similar to this one, and asked: whyshould I care? I had to pause for a moment and give that one somethought. I answered with a brief explanation of what has transpiredsince the first American credit union in 1909. I mentioned nameslike Edward Filene and Roy F. Bergengren. I explained that manypeople have given much of their lives to build and preserve thecredit union concept. I continued that it is important to me eventhough times change and business models are revised to keep pacewith a modern financial system. I told him that credit unions standfor something different. She looked at me and smiled, so I am notsure if I reached her but I hope so.

Now, let me ask you, dear reader: what do you want for ourfuture? Does the past mean anything and how many of you arecompelled to dig deep and do the right thing for your members andthose who do not know you exist. If I hear the phrase “creditunions are the best kept secret” one more time I will scream…wekeep hearing that we have done a poor job at communicating toAmericans what we are about and that we exist to serve them. Well,here is an opportunity to put our money where our mouth is! Wedon't need a doctor to unblock the problems in credit unionmortgage lending, just some people with good old-fashioned Americanpride and ingenuity!