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U.S. Credit Unions Outperform Banks in Mortgage Lending Efforts

While credit unions are the original consumer financial protectors and work every day to help families reach their dreams of homeownership, a newly released two-page report published by America’s Credit Unions (ACU) supports this claim.

The latest available Home Mortgage Disclosure Act (HMDA) data shows that credit unions nationwide remain the best option for consumers when it comes to buying a home. “In fact, credit unions are every consumer’s best option when it comes to purchasing, refinancing, or improving their home,” the study states (*Based on ACU’s analysis of 2022 HMDA data using the rubric and performance criteria developed and employed by the National Community Reinvestment Coalition—NCRC in its 2009 report “Credit Unions True to their Mission?—Part II”).

ACU’s analysis shows that credit union mortgage lenders equaled or outperformed bank mortgage lenders in 118 of 159 metrics — 74 percent of all criteria studied.

“Credit union mortgage lending efforts benefit consumers across all key demographics, including share of loans to Blacks, Hispanics, women, and low-to-moderate income borrowers, as well as five other groupings,” the report finds.

It also notes that Community Reinvestment Act (CRA) requirements aren’t necessary for credit unions to serve the underserved. Unlike banks, which are compelled by the CRA due to historical systemic failures to lend in minority and lower-income communities, credit unions act because of their focus and structure as member-owned, not-for-profit financial cooperatives.

“The credit union mortgage approval disparity ratios equal the rate reported by CRA banks in every key demographic evaluated, without credit unions being subject to CRA,” it states. “Credit unions are people helping people.”

The analysis also reveals that two-thirds of all U.S. credit unions have restricted fields of membership that legally prevents them from serving broader communities — restrictions that banks do not face. Despite this, credit unions achieve an elevated level of favorable lending outcomes across the nation.

All consumers, including the financially challenged, save big with credit unions:

  • Credit union members saw more than $22.9 billion in economic benefits for the 12 months ending December 2023, and non-members received billions more in benefits due to credit unions’ presence in the marketplace. *Based on America’s Credit Unions’ analysis of NCUA and DataTrac data.
  • Borrowers saved as much as $70,000 during the life of a 30-year fixed rate mortgage when financing with a member-owned credit union rather than a for-profit bank or mortgage company. *Based on 2022 HMDA data.
  • Savings are the largest for those with significant credit score challenges. *Low monthly payments and more access to personal counseling services at credit unions results in lower higher resilience (lower delinquency) among credit union members.

“Credit unions want to do more,” the report concludes. “In general, credit unions stand ready to help minority and disadvantaged populations have access to more options and services they need. Adjusting field-of-membership restrictions to allow more access, rather than imposing new costly layers of regulations on credit unions, would provide more financial options for those who need it most.”

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