Alliant CEO Discusses America’s Subprime Lending Crisis
October 02, 2007 | Alliant Credit Union
CHICAGO - In a recent message to members, David W. Mooney, President and CEO of Alliant Credit Union, Chicago, discussed the subprime lending crisis that has resulted in economic turmoil across the country.
According to Mr. Mooney, who manages one of America’s largest credit unions, “The crisis was caused by an under-estimation of risk by financial market participants misled by the strong economy, rising home prices and other economic factors in recent years.”
Subprime mortgages and other subprime loans are known to be risky for lenders and borrowers alike due to their high rates, high payments and the questionable credit of those receiving the loans. Commenting on this fact Mr. Mooney added, “When delinquencies and defaults inevitably began occurring, lenders became concerned about the scope of the problem. As a result, funds available for lending or investment became restricted. And, businesses relying on others to provide liquidity found their operations severely impaired.” It’s become increasingly difficult for people to find funds to purchase or refinance homes, causing a dramatic slowdown in the housing industry.”
Corresponding on Alliant’s Web site (http://www.alliantcreditunion.org), Mr. Mooney emphasized, “In contrast to subprime mortgage lenders, Alliant does not and has not made subprime loans. Like many other prudent financial institutions across America, we have always operated with responsible lending policies, sound investments and a robust capital base.”
“It’s clear that the subprime lenders are now more mindful of risk, if overly so. There has been a ‘flight to quality’, with terms and pricing of credit becoming more rational. The shakeout in the mortgage market means that there are fewer mortgage lenders, and those who remain are more restrained. This will benefit our business.”
Alliant Credit Union is a not-for-profit, independently operated financial cooperative with more than 207,000 members and $4.6 billion in assets, making it the largest credit union in Illinois (and among the largest in the nation) based on asset size.
As a member-owned financial institution, Alliant exists to foster members’ financial well-being and to serve their best interests. Alliant is headquartered in Chicago at 11545 W. Touhy Avenue and is an Illinois-chartered credit union, and as such, is under the supervision of the Illinois Department of Financial and Professional Regulation. Alliant is an equal housing lender and federally insured by the National Credit Union Share Insurance Fund, which is administered by the National Credit Union Administration, an independent agency of the U.S. Government.
© 2007 Alliant Credit Union. All Rights Reserved.