Credit unions have continued to lend during the pandemic because their mission is helping people, CUNA President/CEO Jim Nussle told CNBC recently. Nussle, along with CUNA Senior Economist Jordan van Rijn, discussed credit union lending during economic hardship.
“Because we’re a cooperative and a not-for-profit cooperative, we don’t have the same motivation to make money off your misery,” Nussle said. “If people think that you have their best interests at heart … even in the middle of crisis, people recognize that. I think it creates loyalty and means more people during times of crisis might be more willing to come to a credit union.”
The article highlights several credit union members who went to their credit union as the pandemic hit them hard. Van Rijn also looked into why credit unions increase lending during rough economic times.
“During periods of risk and uncertainty, banks tend to pull back a lot more on lending and just get a lot more conservative. But credit unions as part of their mission is just to continue to serve the members,” he said.
The article also highlights credit unions’ motives and model and how it means more credit uniosn are located in low-income and racially diverse areas.
More than 75% of credit unions are in ethnically and racially diverse areas compared to 70.5% of banks, and more than 8% of credit unions are in low-income areas, compared to 5.3% of banks, according to CUNA.