In his testimony, Mr. Taylor said that credit unions have not satisfactorily served minority and working communities, thereby reducing the level of responsible loans in traditionally underserved markets.
Citing a study released last year by NCRC, Mr. Taylor states that “credit unions, which have a statutory duty to serve people of “small means,” issue lower percentages of home loans than banks to minorities, women, and low- and moderate-income communities.”
"NCRC analyzed banks’ and credit unions’ performance on three lending types: home purchase, refinance, and home improvement. Across the three loan types, banks and credit unions were assessed on 69 performance measures scrutinizing: 1) the percent of loans to various groups of borrowers, 2) denial rates confronted by minority compared to white borrowers and lower income compared to upper income borrowers, and 3) approval rates experienced by borrowers. In 2007, banks outperformed credit unions on 44 of the 69 performance indicators (or 64 percent of the time). Credit unions surpassed banks performance only 7 percent of the time, while banks and credit unions performed equally well almost 30 percent of the time. In 2006 and 2005, banks performed better than credit unions on 65 percent of the indicators."
He also pointed out that the NCRC study found that state chartered credit unions in Massachusetts, which are subject to a state CRA requirement, outperformed federal credit unions in Massachusetts in serving underserved communities in Massachusetts.
In his testimony, he states that "mainstream credit unions clearly have the assets, resources, and geographic reach to serve minorities, women, and low- and moderate-income communities."