NAFCU: Credit Unions Beating Banks in Providing Mortgages to Underserved

WASHINGTON–NAFCU is using today’s hearing on HMDA data to highlight how credit unions can be part of the solution to serving the underserved. NAFCU Director of Legislative Affairs Brad Thaler sent a letter to key members of the House Financial Services Committee’s Subcommittee on Oversight comparing credit unions’ record on mortgage loans to that of banks based on the recently released 2005 HMDA data. “An analysis [of the data] shows that credit unions are making smaller mortgage loans than banks and thrifts and have a higher percentage of their mortgage loans going to low- and moderate-income borrowers,” Thaler wrote. “Furthermore, an analysis of the HMDA data shows that 18.8% of credit unions’ loans went to households with less than $40,000 in income, compared to 16.1% at banks and 12.4% at thrifts.” The letter goes on to point out that in comparing these types of loans, credit unions tended to charge better rates than did their banking brethren. “We believe that credit unions are part of the solution in providing those with lower incomes and minorities with more reasonable mortgage loans that will enable them to achieve the American dream of homeownership,” Thaler concluded.