ARLINGTON, Va.–There appears to be some irony at work among policymakers when it comes to the role of credit unions in the economic recovery, according to NAFCU. Elected officials have been slow to grant CUs expanded authorities to serve certain markets even while proposing the creation of new institutions to do so.
When it comes to helping small businesses, for example, Brad Thaler, VP-legislative affairs with NAFCU, said the association believes credit unions still need “more tools in the toolbox” to play a greater role.
That includes, said Thaler, support for the Access to Credit for Small Businesses Impacted by the COVID–19 Crisis Act of 2021 sponsored by Rep. Brad Sherman (D-CA) and Brian Fitzpatrick (R-PA). The legislation is designed to help ensure that community credit unions have the flexibility necessary to be able to provide their member businesses with the access to credit they need during the pandemic and throughout the economic recovery, according to the co-sponsors. More specifically, it gives CUs the ability to exceed the 12.25% cap on member business loans.
“It exempts member business loans for a period post-national emergency, because we realize that a lot of small businesses are going to need access to credit once the emergency is over,” said Thaler.
‘Hey, Look at Us’
On the consumer side, there has been momentum in some state legislatures to create so-called “state banks” to provide financial services to lower-income communities or in communities where no financial services are available.
“From a broader perspective, the idea of trying to ensure individuals have access to financial institutions is an important one,” said Thaler. “But we think there are better approaches, such as allowing all credit unions to serve underserved areas. That is something for which we have advocated for 15-plus years. Credit unions want to go in and serve these underserved populations and it seems that policymakers want to ensure they get served and have all these ideas and here we are saying, ‘Hey, look at us. We just need you to change this policy. It would be a lot easier than standing up this new financial institution.’
“We support the access, but think there is an easier way by using what is already here,” Thaler added.