WASHINGTON—Ahead of a House Financial Services Subcommittee hearing on expanding access to the financial system at which legislation under consideration includes a proposal to allow all federal credit unions the ability to add underserved areas to their FOM, NAFCU sent a letter to the subcommittee supporting these efforts.
In the letter, Brad Thaler, NAFCU’s vice president of legislative affairs, highlighted a recent report from the Federal Reserve that found that between 2012-19 credit unions grew their branch presence in rural areas by 2%, while branch presence among both community banks and larger banks declined.
Thaler told Congress that credit unions are eager to help in underserved areas and urged the subcommittee to support the Expanding Financial Access for Underserved Communities Act discussion draft.
Additional Concerns Expressed
In addition, Thaler expressed concerns with additional proposals up for discussion before the subcommittee that would create new Federal Reserve hosted accounts and expand the ability of the Postal Service to offer financial services. Specifically, he noted the association’s concerns the "FedAccounts" and postal banking proposals and stated they "would create an entirely new government-run consumer banking system."
"The Federal Reserve may not have the bandwidth to develop a FedAccounts system, and NAFCU believes its resources would be better directed toward finalizing FedNow, its proposed real-time payment system," wrote Thaler. "As for postal banking, NAFCU and our member credit unions are very concerned that allowing USPS to provide banking services will be beyond its core competencies, will raise serious regulatory and consumer protection questions, and will present significant competitive issues for private sector entities."