There is a separate four-level threshold for real estate lending. From there, loan officers attain lending authority based on their experience and performance on an in-house skills assessment.įor example, midlevel loan officers can grant consumer loans up to $20,000 secured or $2,500 unsecured while top-level lending employees can make secured loans of $45,000 or more and unsecured loans of $7,500 or more. When it comes to granting loan amounts, the credit union uses a tiered system that extablishes lending parameters across four categoeies. This process helps NavyArmy consider a member's situation in ways no auto-decisioning tool could replicate while removing emotion from the process. What will the member lose if they default? Transportation to work? A roof over their head? Is the borrower an established member? Do they have direct deposit? Do they handle their other financial products well? What has been happening in the past 24 months of the borrower's life? Do they have a history of skipping or making late payments? If yes, is this recent history? What is the cause? How long has the member been employed at their current job? If the borrower defaults, can the credit union find them? Is the borrower asking for more credit than they can afford to pay back? NavyArmy believes in supporting a culture of 'yes' even when others say 'no.' To that effect, its 70 loan officers review each application on a case-by-case basis - without any automatic or centralized decisioning.ĭuring this process, the lender weighs five key considerations, each of which could count for or against the borrower. 'We take great pride in fulfilling our social mission.' 'The people we deal with can't go into a Wells Fargo or a Bank of America and get a consumer product,' Morrow says. 'There are very few lenders here who go after low B, C, and upper D credit tiers.' According to Morrow, the credit union funded $800 million in gross loans last year, a significant injection of capital that has helped members buy houses and cars and contributed greatly to the area's local economy. 'We fit a need that is not met in our market by anyone else,' says Dana Sisk, the credit union's chief operations officer.

Likewise, its 12-month member growth was 10.7%, nearly triple the state-level norm. In addition to credit-quality issues, NavyArmy must also wrangle with complications that derive from the region's prevalent off-the-grid commerce and emphasis on cash transactions - which can create difficulties proving income - as well as a general distrust of financial institutions.īeing a community-oriented, not-for-profit lender in this environment is not easy, but NavyArmy has proven it is up to the task.Īs of midyear 2014, the credit union's average member relationship was $27,737 versus $15,505 among all credit unions in Texas, according to Peer-to-Peer Analytics by Callahan & Associates. A low FICO score does not mean these are bad people. There's a big difference between bad credit and sloppy credit. 'A low FICO score does not mean these are bad people.' 'There's a big difference between bad credit and sloppy credit,' Morrow says. The credit union's home city did not fare much better, with Corpus Christi coming in only three spots above Harlingen in the listing.įortunately for residents within its eight-county footprint, NavyArmy views these scores as the beginning of a discussion on creditworthiness, not the end of one. In 2013, an Experian listing named Harlingen - a city that NavyArmy began serving when it switched from a federal to state charter in 2011 - as having one of the worst average credit scores in the country.

'In South Texas, we have the worst FICO scores in the country,' says Gerry Morrow, the chief lending officer of Navy Army Community Credit Union, a $2.1 billion institution headquartered in Corpus Christi, TX. Everything's bigger in Texas, except for the credit scores that is.

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