In 2016, federally insured credit unions did a very good job penetrating majority minority census tracts.
Recent redlining cases brought by CFPB and DOJ advanced an approach to market penetration analysis that looks at how individual lender’s shares of market activity varies by census tract demographics.
Similarly, the analysis presented here looked at credit unions’ market share between census tracts that are majority white and majority minority. It focuses on the top ten credit union markets for 2016, listed below, collectively accounting for 15.05% of nationwide activity.
Table: Top ten MSAs and Metropolitan Divisions for mortgage applications to federally insured credit unions (excluding purchased loans), 2016
| Row | MSA/Metropolitan Division | # of apps | % of US credit union activity |
| 1 | Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Division | 26,819 | 2.19 |
| 2 | Los Angeles-Long Beach-Glendale, CA Metropolitan Division | 21,891 | 1.79 |
| 3 | Atlanta-Sandy Springs-Roswell, GA MSA | 18,357 | 1.50 |
| 4 | Minneapolis-St. Paul-Bloomington, MN-WI MSA | 17,824 | 1.46 |
| 5 | San Antonio-New Braunfels, TX MSA | 17,422 | 1.42 |
| 6 | Houston-The Woodlands-Sugar Land, TX MSA | 17,092 | 1.40 |
| 7 | Seattle-Bellevue-Everett, WA Metropolitan Division | 16,589 | 1.35 |
| 8 | San Diego-Carlsbad, CA MSA | 16,369 | 1.34 |
| 9 | Portland-Vancouver-Hillsboro, OR-WA MSA | 16,061 | 1.31 |
| 10 | Phoenix-Mesa-Scottsdale, AZ MSA | 15,745 | 1.29 |
Source: HMDA data in LendingPatterns™
Of the ten markets listed:
- In five, there were no statistically significant differences in market share.
- In four, credit unions’ market share in majority minority tracts was statistically significantly higher than in majority white tracts.
- In the tenth market, the LA area, the opposite was true, although in that market, the share of apps from minority applicants was slightly higher at CUs (54.88%) than across all lenders (54.14%).
These observations suggest that credit union mortgage lending was robust in high-minority areas, and therefore credit unions are generally doing a good job of satisfying consumers’ mortgage credit needs.
Credit unions who want to tell their unique story should consider their members’ home addresses and branches. Maps can help to uncover loan production opportunities and also explain why mortgage application activity may be lacking in high-minority areas. The explanation could be that you have no members and/or brick-and-mortar branches in a particular area.
As an example, the map below presents all federally insured credit unions’ branch locations in relation to tract percent minority demographics in the LA area.
Map: Federally insured credit unions’ branch and corporate offices by tract percent minority in Los Angeles Metropolitan Division
Source: LendingPatterns™ (census demographics); NCUA (branch and corporate offices)
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