The Citadel redlining settlement is a landmark moment for credit unions that highlights the need to align lending practices with the diverse needs of their communities. As the first U.S. credit union to face such a settlement, Citadel’s case reveals the potential for unintentional disparate consumer impacts when institutions fail to proactively assess their sales and marketing outreach strategies .
Between 2017 and 2021, Citadel operated 24 branches in the greater Philadelphia area, but only one was in a majority-minority neighborhood. And despite the existence of a significant Hispanic population in Citadel’s market area, marketing materials were exclusively in English, and none of its loan officers spoke Spanish. These factors created barriers for underserved communities and exposed Citadel to regulatory scrutiny. However, the lessons from this case extend beyond compliance—they highlight the broader opportunity credit unions have to close the homeownership gap and expand their impact.
According to iEmergent forecasts, multicultural borrowers will account for over $2.8 trillion in purchase mortgage dollars from 2025 to 2029, representing 31.2% of all purchase activity. This opportunity could grow to $4 trillion, or 43% of the market, by adopting inclusive strategies. Credit unions are uniquely positioned to seize this potential, but it requires moving beyond reactive approaches and embedding multicultural lending into their core strategies.
A Model for Success
Elevations Credit Union is one financial institution that is modeling how integrating diversity, equity and inclusion (DE&I) into organizational culture can drive meaningful results. Since 2016, Elevations has focused on building a comprehensive DE&I framework, implementing programs like ITIN lending and partnering with organizations like NAMMBA to achieve ASIL certification.
These efforts helped Elevations identify and address gaps in lending to underserved populations, leading to measurable improvements in their ability to serve diverse members. In 2023, Elevations earned the Mortgage Bankers Association’s Diversity, Equity and Inclusion Award, a testament to its commitment to fostering inclusivity. Their approach underscores the importance of making DE&I a central part of a credit union’s mission rather than a standalone initiative.
The Path Forward
The Citadel case and Elevations Credit Union’s success offer valuable lessons for credit unions navigating today’s financial landscape. By leveraging data, tailoring outreach strategies and investing in resources like multilingual marketing and bilingual loan officers, credit unions can better serve their communities while reducing regulatory risk.
Adopting a proactive approach to multicultural lending is not just a compliance requirement but a business opportunity. Credit unions prioritizing inclusivity will position themselves for sustainable growth while creating lasting economic opportunities for their communities.
Through continuous improvement and a commitment to equity, credit unions can play a pivotal role in closing the homeownership gap and fostering financial inclusion for all.