Credit unions are thriving

DOWNEY - One by one, as the big "money center" banks stagger and fail, Americans hold their breath and clutch their statements, wondering if their institution will be the next victim.During these difficult economic times, consumers look for a financial institution to trust, and for many Americans, that will mean joining a credit union. As consumers read about banks dying each day they worry about where and how they will find the funds to purchase or refinance a home in this new economy. But for many they have a surprising alternative to banks -- credit unions. Credit unions are among the few financial institutions that have mortgage money to lend to struggling consumers while at the same time operating for the benefit of their members. For the most part, credit unions will not be included with the growing list of financial institutions paying large salary bonuses to executives or throwing large parties at the expense of the financial institution or the American taxpayers. "Credit unions never made the kind of risky loans banks made," explained Fred Becker, CEO of the National Association of Federal Credit Unions (NAFCU) based in Arlington, Virginia. He points to the industry's most recent numbers on loan defaults, which show loans originated at credit unions are defaulting at a rate less than half that of loans made by institutions insured by the Federal Deposit Insurance Corp. (FDIC), meaning banks. Richard Maxstadt, SVP/COO of CUC Mortgage agrees. "We take our direction from our credit-union members," said Maxstadt, "Credit unions as a rule are conservative in their lending. Our loans tend to be plain vanilla, primarily 20- and 30-year fixed rate," he said, adding: "Too many consumers forget that credit unions do make mortgages." In addition, the soon to open Realtor FCU, will be the first Internet-based credit union -- without branches -- serving a nationwide, single association, the National Association of Realtors. "Many of the nation's largest CUs are experiencing substantial increases in mortgage loan volume as millions of homeowners seek to lock in lower rates through refinancing their existing loans," stated ACUMA Chairman, John Reed, President/CEO of the Main Savings FCU in Hampden, ME. "This is just another example of how America's credit unions are seizing the incredible opportunity in the current lending markets." Most consumers are unaware they can join a credit union and apply for a mortgage loan. Even a large percentage of the more than 87 million Americans currently members of credit unions do not understand the benefits. There is a credit union available for anyone who wants to join. One hundred years ago the nation's oldest credit union opened its doors in New Hampshire and successfully weathered world wars and the Great Depression without once closing its doors. With that kind of track record, common in the credit union movement, major media outlets like the New York Times, Wall Street Journal and NBC/Universal can't help but take a new interest in this potential sleeping giant as a means for coming to the rescue of the slumping American housing market. "Being the best kept secret for mortgage loans is not the distinction we desire or deserve. We have thousands of sound and trustworthy financial institutions ready to help American homeowners or those pursing the American dream of homeownership" said Bob Dorsa, ACUMA President. ********** Published: February 13, 2009 - Volume 7 - Issue 43