Study finds fintech offers lending promise rather than missed opportunities for credit unions

Sometimes the effort credit unions take to protect themselves creates the opposite effect — the effort itself harms the organization’s best interests and the interests of those you dedicate yourselves to helping.

A recent study by Filene Research and credit reporting agency TransUnion found that as credit unions have tightened lending standards during this uncertain era of the COVID-19 pandemic, they may be overlooking and essentially hurting their historic standing as the resource who can best serve the financial inclusion needs of the underserved or low-income households in the United States.

According to the study, credit unions have been finding their charge-off rates and delinquencies alarmingly low, with their lending officers worrying their organization may be missing out on chances to improve their community’s financial health and inclusion goals while capitalizing on such a powerful and relevant revenue stream.

The study, written by Melissa K. Wrapp from the University of California at Irvine, claims that every financial asset available, from artificial intelligence to in-person conversations, features risks and challenges. Despite that justification, lending officers included in the study voiced embarrassment at the reasons for their credit unions’ charge-off rates and excessively low delinquency.


continue reading »