WASHINGTON—Credit unions play a “pivotal role” in expanding financial access to underserved areas, NAFCU told the House Financial Services Committee’s Subcommittee on Diversity and Inclusion ahead of its hearing this week on economic inclusion.
Senior Vice President of Government Affairs Greg Mesack expressed strong support for the House-passed Expanding Financial Access for Underserved Communities Act, arguing it would allow credit unions to fill the gap left by large banks in underserved areas.
In the letter, Mesack noted the number of bank branches in rural and underserved areas has declined 10.8% over the last decade, while credit union branches have grown 2.4% in those areas during the same time frame. Mesack also cited a NAFCU survey that found that 87 of NAFCU members reported providing payment protection program loans to new members and business that were turned away by banks.
“The numbers show that credit unions stand ready to do more and help those who have been left behind by banks,” said Mesack.
Other Points Raised
Other points made in the letter include:
- Mesack highlighted NAFCU’s support of provisions within legislation that aims to make the CDFI Bond Guarantee program permanent. Currently, the program “has been extended on a year-by-year basis in annual appropriations bill,” but Mesack said the CDFI Bond Guarantee Program Improvement Act of 2022 would be a major improvement to provide certainty to the program.
- NAFCU supports provisions to assist CDFIs and minority depository institutions in “gaining access to programs, including the CDFI Fund.” The letter referenced the challenges credit unions have faced with the CDFI Fund in the last year, such as “a backlog of applications, poor communication, a lack of a ‘cure period’ to resolve issues, and changes to the certification process making it more cumbersome.”
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