Report RevealsOregon Credit Unions’ Poor Record of Mortgages to Low-Income Borrowers

Less than one percent of mortgages go to low-income borrowers. Calls into question “public benefit” in exchange for tax subsidy.

Portland, Ore. – A report analyzing Oregon credit unions’mortgage lending finds the industry made 11,775 home mortgage loans in 2013, but less thanone percent – 96 mortgages - went to low-income households. Credit unions were granted non-profit, tax-exempt status in order to serve persons of “modest means,” but recently released federal data is calling that mission into question.

“The public policy conversation about Oregon’s largest credit unions’ public benefit needs a reality check,” said MarvinUmholtz, the report’s author. “The largest Oregon credit unions do not focus on supporting low-income populations or those of modest means.”

According to new federal data made available through the Home Mortgage Disclosure Act:

•Of the 11,775 mortgages originated by Oregon credit unions last year, less than one percent – 96 mortgages - went to low-income borrowers - less than one percent. 14 percent went to moderate income; 53 percent went to middle income; 32 percent went to upper income.

•Oregon credit unions made 18 mortgage loans on homes of $1 million or more.OnPoint Community Credit Union, the state’s largest credit union, made four mortgage loans on homes of $1 million or more.

•Oregon’s five largest credit unions averaged only one percent of their mortgage originations to low-income individuals.

•There were seven Oregon credit unions that originated loans to ONLY upper income individuals.

Other findings:

•Only three percent of Oregon credit union branches are located in low-income communities.

•In the last 14 years, the number of Oregon credit unions has shrunk from 115 to 66 while their combined assets have grown from $7.4 billion to $17 billion. Large credit unions are growing, consolidating and indistinguishable from community banks.

•The top five of Oregon’s 66 credit unions now hold half of the industry’s assets and have 42 percent of Oregon’s credit union customers. OnPoint is now the second-largest Oregon-based financial institution.

•The CEO of OnPoint, Rob Stuart, had a 2012 compensation package worth $2 million and that same year Ron Barrick, CEO of Advents Credit Union, received a $2.5 million retirement distribution.

“Oregon credit unions benefit the state’s economic development, but that is hardly unique when compared with tax-paying financial institutions that have the same impact,” said Umholtz. “Given their track record of service to low-income communities, the question is ‘What public benefitis being provided in exchange for the industry’s tax subsidy?’”

About Marvin Umholtz

Marvin Umholtz is President & CEO of Umholtz Strategic Planning & Consulting Services based in Olympia, Washington south of Seattle. He is a 39-year credit union industry veteran who has held many leadership positions with credit union organizations and financial services industry vendors during those years. A former association executive and lobbyist, he candidly shares his credit union industry knowledge and analysis with public policymakers, financial industry executives, and vendor companies. Umholtz also writes and distributes CU Strategic Hot Topics, a “clients and colleagues” newsletter that analyzes the actions of the National Credit Union Administration (NCUA), the Congress, the Consumer Financial Protection Bureau (CFPB), the Federal Reserve, the lagging economy, uncertainties in financial markets, divisive partisan politics, and the growing conflict about the future role of credit unions in the financial services industry.

For more information about the report or to speak with Marvin Umholtz directly, he can be reached at (360) 951-9111.

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