By Robert Freedman, senior editor, REALTOR® Magazine
There’s a lot happening with the REALTORS® Federal Credit Union, so it’s a good time to take stock of where the company is and where it’s going. If you’re not familiar with the company, it was launched about 15 months ago as a REALTOR-friendly financial services company. What that means, principally, is that it underwrites loans to NAR members based on their credit history, not the predictability of their income.
That’s an important distinction from other financial institutions because it recognizes the ups and downs of REALTORS®’ income. As the company’s new CEO, Jane Pannier, told me in an interview last week, REALTORS® who can show they know how to manage their money despite their irregular income make excellent credit risks, and they deserve to be recognized for that.
Pannier came on board just a few weeks ago as CEO. She was previously the company’s general counsel but was asked to head the company after Tom Glatt, its first CEO, moved on. Pannier’s involvement in credit unions goes back decades and includes positions on both the public and the private side. I can’t imagine there’s more than a handful of people in the United States with more experience than her in the business, so it was especially informative to get her views on what’s happening.
A couple of highlights of what’s new at the company, which is now $79 million strong and has almost 6,000 members: First, the credit union has just rolled out several IRA products, including traditional, SEP, and Roth IRAs, and it just received the OK from its regulator to offer business loans. That’s one of the main things the company is working on now. It has to get some back-office processes in place before it can offer the loan products to brokers and other business owners among its membership, so it’s busy taking care of that.
On the matter of terms, if you were to open a regular account as an individual, you can get a savings rate of about .50 percent. If you took out a certificate of deposit, you can get a rate of up to 2.70 percent, depending on the term.
If you have an existing car loan with another lender, you can refinance that loan with the credit union at the same rate that would be available to a new-car buyer at the time of your transaction. That’s something different than what you would find at a typical bank. Banks tend to charge higher rates for loans to refinance other lenders’ loans, but the credit union is not going down that road.
If you have the time, I recommend spending the next six minutes watching the interview with Pannier. Her remarks on how the credit union underwrites loans to NAR members is interesting—but also reassuring, because she talks about how the company balances its goal of helping REALTORS® with the need to keep the fund safe.