NEW YORK — "When America gets a cold, we get pneumonia," said Cliff Rosenthal, CEO National Federation of Community Development CUs.
Credit scores have been declilning across the board, hitting many mainstream credit unions, but the problem is magnified for low-income CUs, Rosenthal explained. "We have certainly seen some serious deterioration in places like California," he added.
Even more disturbing, Rosenthal noted, is that some regulators have put the screws to low-income CUs with borderline capital ratios. One unnamed credit union was even told they could not make loans to individuals with less than a 650 credit score.
"That kind of action is devastating to low-income credit unions. That's their stock and trade even in good times," Rosenthal pointed out. "For a regulator to come in and say you can't do business with those folks is tantamount to saying you can't do business, period."
