WASHINGTON–Sen. Sherrod Brown (D-OH) told NAFCU’s Congressional Caucus he and the Senate committee he chairs share many of the same goals when it comes to boosting Americans’ incomes and opportunities to build wealth, even as many Americans fear they will never have the opportunity to do either.
Noting the actual name of what is commonly called the Senate Banking Committee is actually the Senate Committee on Banking, Housing & Urban Affairs, Brown said the committee he has chaired since February of this year has traditionally focused in the past on Wall Street and not enough on community banks, credit unions and “certainly not housing.”
America has watched and the committee has held hearings, according to Brown, as “whole towns have essentially been decimated by big banks, corporations and Wall Street.”
“One day we brought the CEOs of the six biggest banks before this committee. It was the first time all these banks it ever been held accountable at a hearing like this and they bragged about investments they've made in underserved communities,” Brown told credit unions in remarks presented virtually. “Those investments are just a tiny fraction of what they spend and stock buybacks. For too long our economy hasn't worked for most people. (Growth in) profits, stock prices and executive compensation has been stratospheric, but workers’ wages have essentially been flat. It's not paying off like it used to and for Black and brown workers and women.”
Brown told Congressional Caucus hard work is not paying off as it should for many people, and that he often hears people don’t trust Wall Street and big banks.
‘Don’t Have Control’
“Americans feel like they don't have control over their own money,” Brown said. “Too often they're right. They've been burned over and over by second chance accounts and transfer fees and late fees and overdraft fees. We've seen the results. More and more people turn to check-cashers and payday lenders and shady fintech apps from Silicon Valley. These options might seem like a quick fix for they can be just as abusive as the big banks but with fewer consumer protections and little oversight.”
Brown said he wants to make sure credit unions have the ability and the technology to grow their businesses while not being pushed out of the industry by big tech companies “trying to get around banking laws.”
Brown noted he is co-sponsoring legislation that would extend the Military Lending Act 36% interest rate cap on small dollar loans to everyone. That legislation exempts credit unions.
“Federal credit unions are exempt from our bill because they already offer affordable loans that members can afford to repay,” Brown said. “This would ensure that credit unions are on a level playing field with banks and fintechs and any other companies that offer small dollar loans.”
Brown asked credit unions to support the legislation.
Seeks Support for No-Fee Account Plan
Meanwhile, Brown said there are still more than 20 million Americans who don't have a bank account or can't get the financial services they need at a fair price, which is why legislation he also supports would create no-fee bank accounts available to every American in a post office or a small bank or credit union backed by the Federal Reserve, which would reimburse the FIs for those operating costs related to the no-fee accounts.
Both credit union trade groups have opposed any legislation that would allow the U.S. Postal Service to provide financial services.
In addition, Brown called on credit unions to play a bigger role in helping people to get into housing, especially for those who feel “left out” of the opportunity.
Many ‘Shut Out’ From Homebuying
“There are a lot of homes that look affordable that are listed for $50,000 or $70,000 that are just a mile from my home, but families can't find lenders to make the loans,” Brown said. “Sometimes, we see these lower credit class properties snapped up by investors paying cash. Credit unions are part of that solution. I want to work with all of you to make affordable sustainable homeownership a reality for more families so that we can grow the middle class in our economy.”
Brown said he will continue to push for financial regulators who reflect the nation's diversity and who are willing to stand up to Wall Street power.
The committee he chairs, said Brown, shares many of the same goals of credit union members.
“We want to see a strong economy with a growing middle class where all workers in all communities in all regions of the country have the opportunity to grow their paychecks and their savings and to build wealth that they can pass on to their children and grandchildren,” said Brown.