Today, nearly three-quarters (72%) of credit unions' total revenues come from interest income. So, when interest earnings as a percent of assets dropped almost 30% in April of this year, more than one alarm bell sounded within the movement.

Credit union leaders across the country are rightly concerned about the sustainability of mortgage lending within what is already a highly competitive environment. In fact, lending executives participating in a May 2022 MGIC survey ranked the expected difficulty of 2022 at an eight out of 10. And while shiny startup strategies for boosting interest income make the headlines, it may be the resurgence of a traditional mortgage lending product that makes the difference.

Borrowers Give ARMs a Fresh Look

We're talking, of course, about the adjustable-rate mortgage. Although the product took a reputational hit during the housing crisis of 2008, a new segment of borrowers views ARMs as both affordable and relevant to their lifestyles and financial goals. In June, the Mortgage Bankers Association reported that the ARM share of applications had jumped to over 10%.