CU’s Go HELOC Crazy

August 15, 2017 at 8:44 am Leave a comment

I had a sense that more credit unions were getting involved with HELOC’s but I didn’t know how big the trend was until I read this article in today’s American Banker. The paper reports that the growth in credit union HELOC lending combined with an overall decline in the number of HELOC accounts has sent the share of HELOC’s owned by credit unions soaring. In fact, credit unions now hold 13.16% of the HELOC market up from 9.63% in 2015. The graph accompanying today’s blog underscores just how big the increase has been.

What’s even more interesting is the reason the article points to for the trend. While banks are still holding back the reigns with more conservative underwriting standards, credit unions are more comfortable with underwriting loans based in part on comfort with the member’s payment history. Ezra Becker, a senior Vice President at Trans Union Financial Service Business Unit points out, “credit unions do a good job working with member loyalty so they may be willing to make a loan that another institution may be unwilling to make.”

Now for a boring compliance reminder. This increased interest in HELOC’s is coming just as changes to HMDA regulations mean that any institution that makes more than 500 home equity loans a year as of January 1, 2018, and meets other compliance thresholds, will now have to report these loans.

OH, Canada!

The world is a bit more sensible this morning. As if things weren’t wacky enough, I noted in a recent blog that our level-headed friends to the North had banned credit unions from using the word banking in their advertising. Fortunately, it was recently announced that this ban will be put on hold pending further investigation.

Hampel Retires

Today, Bill Hampel, the credit union industry’s leading economist, is retiring after a mere 39 years of service.

In the immortal words of Charles de Gualle, “the graveyards of Europe are filled with indispensable men” but the void left by Hampel’s retirement will be a tough one for anyone to fill.  I only had the opportunity to meet Bill in passing a few times, but anyone who has tried to explain the impact of policies on credit unions to regulators, legislators, the general public or family members who still don’t understand that I don’t work for a union, owe a debt of gratitude to Bill. His economic analysis and ability to explain how the economy impacts credit union operations has been an invaluable resource that we are all going to miss.

Entry filed under: Compliance, econony. Tags: , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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