WASHINGTON– A new study from the National Credit Union Foundation suggested that, by and large, credit unions are missing an opportunity by not serving lower income consumers with used car loans.
Steer Clear: How Credit Unions Help Car Buyers Avoid Predatory Lenders reported that many credit unions do not offer loans to borrowers with lower credit scores due to unfamiliarity and uncertainty with the market, fear of potential losses and lack of data about the opportunity and a mixture of apathy or reluctance on their boards of directors.
The report, which is based on a survey of 400 credit unions which have been part of the Foundation's Real Solutions program, recommended seven specific strategies that credit unions can use to meet these consumers' needs. The report first makes the case that serving this market is economically viable and then makes concrete recommendations for how CUs should do it.
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