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Wisconsin CU League News Release - 09/14/09


Flawed report ignores credit unions’ success in serving Wisconsin’s families


Pewaukee, Wis. – A report released by the National Community Reinvestment Coalition (NCRC) uses faulty methods to conclude that banks are doing a better job than credit unions in serving low and moderate-income persons, and calls for unnecessary regulation that would prove costly to the 2.2 million member-owners of Wisconsin’s credit unions.


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Among its flaws, the NCRC mistakenly assumes that credit unions are intended to serve only the poor.  “As with their previous report on credit union service, the NCRC cherry picks data and ignores findings from federal regulators that show credit unions are fulfilling their true mission – to serve all working Americans,” said Brett Thompson, President & CEO of The Wisconsin Credit Union League, the state trade association serving more than 240 Wisconsin credit unions.  He points out that Congress, as well as credit unions’ federal and state regulators, have reaffirmed time and again that credit unions’ mission is to serve all working Americans and their families, not just the poor.


Furthermore, the NCRC bases its conclusions on a 2006 Government Accountability Office study that has been all but disavowed by the GAO itself, which concluded its data was flawed and that no conclusions about credit unions or the people they serve could be drawn from it. 


And it’s noteworthy that though the general conclusions of their study may be off-base, the state-specific data in NCRC’s previous study shows that Wisconsin credit unions outperform Wisconsin banks in serving minorities and people of modest means, despite banks being subject to the Community Reinvestment Act while credit unions are not.  Wisconsin credit unions outperformed Wisconsin banks in all three areas covered by the study: providing single family home purchase loans, refinancings, and home improvement loans.


Finally, according to reliable Home Mortgage Disclosure Act (HMDA) federal data, the real facts are these: Wisconsin’s low-income mortgage borrowers’ approval rate is 74.7% at credit unions compared to 49.6% at non-credit union lenders. For minority mortgage applicants, the credit union approval rate here is 72% compared to 46.6% at non-credit union lenders.


And although credit unions have only a 10% market share for financial services in Wisconsin, they operate 40% of the financial institution branches in the state’s low-income census tracts. By contrast, 94 percent of all Wisconsin banks – including 12 of the largest 20 banks – have no branches in low income census tracts.


“Wisconsin’s credit unions are dong a great job serving all of their 2.2 million members,” says Thompson.  “Last year, their members saved $208 million by saving at and borrowing from their local credit unions instead of banks.  Credit unions don’t need more regulation to do right by their members—they’re already doing it.  One more flawed study can’t change the real facts.”

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