Winners of the 2011 Excellence in Lending Awards turned their vision into results by developing new products, revising underwriting policies, and streamlining operations.
Sponsored by the CUNA Lending Council and CUNA Mutual Group, the awards recognize credit unions in four categories: outstanding consumer lending (less than and more than $250 million in assets), mortgage lending (less than and more than $250 million in assets), business lending, and serving members of modest means.
Interviews with the five Excellence in Lending Award-winning credit unions yielded this sage lending advice:
Latino Community Credit Union in Durham, N.C., achieved a rare double win in 2011 for both the mortgage lending and low/modest means award categories.
Keys to Success: Latino Community CU
• Offers a full line of financial services to meet the needs of the many previously unbanked Latinos in North Carolina;
Erika Bell, vice president of strategy and services for the $106 million asset credit union, cites several key practices in Latino Community’s success:
“It’s a mistake to think that a credit score is going to provide you with an accurate assessment of someone’s creditworthiness, particularly in underserved markets,” Bell says. “We’ve been able to hone our underwriting criteria based on our members’ needs.”
Mortgage products are designed to help members purchase their first homes. Options include two-year, adjustable-rate first mortgages and fixed-rate mortgages with terms of 15, 20, 25, and 30 years.
Members can obtain 90% mortgage financing without a formal credit history if they provide three alternative credit references for a minimum of 12 months, with at least two from utility companies.
Partnerships with Latino, religious, immigrant, and social justice organizations help Latino Community reach current and prospective members.
State Employees Credit Union [ncsecu.org], Raleigh, N.C., provides back-office services and serves as a mentor for compliance, information technology, and data services. This allows Latino Community to focus on developing policies and products that meet its members’ needs.
“We’re very proud of the way we buck the assumption that low income or underserved equals higher risk,” Bell says.