Fair Lending Update: Reaching the Credit Invisible

This article explores ways to evaluate the creditworthiness of the credit invisible through alternative data while maintaining safety and soundness and limiting fair lending risks.

Written by Reginald Watson, Regulatory Compliance Counsel

In a consolidating financial services industry, credit unions are uniquely positioned to serve members of the community who may have a limited credit history, the so-called credit invisible. Many credit unions even see it as a prime area for growth. The difficult part is finding ways to evaluate the creditworthiness of such individuals while adhering to the safety and soundness standards that have come to define our industry and avoiding regulatory scrutiny.