Mortgage Loans at CUs Had Lower Interest Rates Than Other Lenders in 2018, NCUA Study Shows
The study finds the median interest-rate spread for CU mortgages was 9 to 14 BPS lower than other mortgage originators.
Mortgage loans made by credit unions in 2018 generally had lower interest rates than mortgages made by other lenders, according to a new study released at Thursday’s NCUA board meeting.
The study, conducted by the agency’s economists, analyzed data from the 2018 Home Mortgage Disclosure Act. The study reported that the median interest-rate spread for credit union mortgages was 9 to 14 basis points lower than other mortgage originators.
Agency officials said an analysis of credit union risk indicators showed that differences in mortgage interest rates were not likely the result of differences in credit risk.
In other businesses, agency officials also said the NCUA Share Insurance Fund’s equity ratio stood at 1.35% at the end of 2019, an increase from 1.33% reported at the end of June of that year. However, the equity ratio was still lower than the normal operating level of 1.38%.
The agency board also approved the publication of an inter-agency policy statement on the implications of the upcoming Current Expected Credit Losses standard.
Chairman Rodney Hood said he wanted to ensure that credit unions have as much information as possible before the standard becomes effective in 2023.
Agency officials said the agency is developing a dedicated web page for CECL.
The board also approved a proposed rule governing corporate credit unions.