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CU Snapshot

 September '18August '18
# of CUs5,6535,686
Total Assets
($ billions)
Total Savings
($ billions)
Net Cap.
Loans to Savings85.5%84.5%
Loan Delinq.0.7%0.7%

         Credit Union Indicators

Success With Nonprime Auto Lending

It's not charity—it's good business.

Nonprime auto lending can be a win for both credit unions and members, according to a National Credit Union Foundation feasibility study.

The Foundation, Filene Research Institute, and the Ford Foundation partnered to test such a lending program within Filene's Accessible Financial Services Incubator. The results? Ten credit unions closed 7,605 loans for more than $102 million, with an average loan amount of $12,136.

"Through prudent pricing for riskier nonprime auto loans, credit unions can add to their bottom lines, while at the same time fill a social need of helping consumers improve their health and well-being through affordable credit for used cars," the report says.

Nonprime borrowers have weak or no credit histories or limited payment capacity. Financial and anecdotal results reveal positive consumer demand and impact.

"This loan had such a huge impact on my life! I have three jobs and am a single mother so having a vehicle is necessary for me to provide for my family," reports one borrower.

Credit unions can offer workers with low wages or low credit scores the ability to purchase affordable cars, which allows them to work for companies not located near public transportation.

Lending to people who work hard and can be trusted to repay their debt isn't charity—it's good business, says Dave Prosser, vice president of community development for $399 million asset Freedom First Federal Credit Union in Roanoke, Va.