ANNAPOLIS, Md.—A bill in the Maryland legislature would create a new $2.5-million venture capital fund for financial technology firms with the goal of increasing access to banking services in low-income neighborhoods—as well as make it less expensive for FIs to establish branches.
House Bill 548, introduced at the request of Maryland Gov. Wes Moore's administration, has two main goals: to create more physical bank branches and to use technology to help low-income people access financial services, the Baltimore Business Journal reported.
According to the Journal’s report, the legislation would give an assessment offset credit to banking institutions and credit unions that retain or build new branches in poor neighborhoods as well as establish a private venture capital fund that would invest in fintech companies.
Nearly 50 Bank Branches Close
The report noted the bill comes as Greater Baltimore lost 49 bank branches in 2022. The decline is in part due to the rise of virtual banking in the wake of the pandemic, which has reduced demand for in-person services. However, a lack of in-person options makes it difficult for people who lack internet access to use financial services, the Baltimore Business Journal explained.
Brad Fallon, Moore's deputy legislative officer, said during a recent Maryland House Economic Matters Committee hearing that banks and credit unions are more likely to work with businesses that are closer to their physical branches, making it important for low-income areas to also have access to brick-and-mortar banking institutions.
The assessment credit would make it cheaper for companies to have physical bank branches. Commissioner of Financial Regulation Tony Salazar said that if the proposed credit is completely utilized, it would cost the state around $250,000 a year, the Baltimore Business Journal said.
It’s Called Fresh for a Reason. And We Offer Home Delivery. For Free!
The biggest, best and freshest news reporting in credit unions remains free in ’23! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more.
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com