Profiting from DEI: Embracing Diversity and Inclusion in Mortgage Lending Means CUs and their Members Will Benefit

Embracing diversity and inclusion is essential in today’s mortgage lending landscape. As refinance activity declines due to rising interest rates, credit union mortgage lenders can increase their market share by attracting minority borrowers. The 2020 Census reflects a country whose population is increasingly diverse, multiracial and breaking down traditional demographic lines. For example, the Hispanic or Latino population grew 23% and the multiracial population experienced a 276% increase between 2010 and 2020.

Diversity, Equity, and Inclusion (DEI) should be a high priority for credit union mortgage lenders. At its most basic, DEI refers to building diverse, equitable and inclusive workplaces that reflect the communities lenders serve. DEI is more than creating a welcoming environment and equal opportunities for everyone. Workplace equity and inclusion mean valuing all employees and providing everyone equal access to resources for career growth and promotion to leadership. On the consumer side, fair lending laws mandate that lenders provide “fair and equal access to mortgage services to individuals without discriminating based on gender, age, race, religion, disability, and sexual orientation.”

A lender committed to DEI focuses on building staff, leadership, and a member base that reflect the borrowers it wants to serve. Diverse staff and leadership create an environment where a broader range of ideas can flourish, boosting the credit union’s bottom line.

Credit union lenders can use technology and data to further their DEI strategies and goals by leveraging Web-based mortgage software to educate borrowers. Lenders can also use mortgage software to examine their loan data to find any gaps in their service. HMDA data provides a simple way to benchmark a lender’s performance against peers and look for ways to expand services or eliminate unintentional biases. Lenders can also use underwriting software that removes bias from underwriting decisions by making sure mortgage applications are not altered based on a borrower’s demographic characteristics.

Read the ACUMA Pipeline article.