WASHINGTON—With the nation’s banking industry in Washington for meetings and Hill visits, credit unions sought to counter with a message around how credit unions are making a “meaningful” impact despite “concerning” proposals and “misleading” bank attacks.
“Our top advocacy priority is protecting the interchange system from bad proposals in Congress and the Federal Reserve,” wrote America’s Credit Unions Chief Advocacy Officer Carrie Hunt in a letter to Congress. “Research shows the current interchange system works. Small businesses, consumers, and financial institutions rely on it to ensure secure payments, affordable financial products, and access to credit.”
With the Fed having put forth a proposal related to interchange, and with the Credit Card Competition Act still before Congress, Hunt added “limiting interchange fees is a proven failed policy: After the Durbin Amendment restricted debit interchange, only 1% of retailers passed these ‘savings’ on to consumers.”
Responses to Claims
America’s Credit Unions also sought to respond to what it said are “flawed and misleading arguments” being made by the banking industry. It argued credit unions:
- Step in when others leave, as banks have closed 19,301 net branches since 2012, while credit unions have opened 1,373
- Provide loans when others won’t, as call report data shows a 30% loan growth at credit unions since before the pandemic, compared to just 15% growth at banks
- Serve financially challenged borrowers, consumers with lower credit scores save up to $10,000 over the life of a car loan and as much as $50,000 over the life of a home loan when using a credit union
- Benefit members (who are also constituents) with more than $21.5 billion in economic benefit last year for the 12 months ending September 2023
- Help people improve their financial lives, including 79% of credit unions that offer secured, credit card programs to help consumers build credit
Letter Sent on Financial Inclusion
Separately, America’s Credit Unions sent a letter to the House Financial Services Housing and Insurance Subcommittee regarding credit unions’ commitment to financial inclusion.
In the letter, ACU President/CEO Jim Nussle highlighted what he said is credit unions’ commitment to furthering financial inclusion and the industry’s long history of assisting members with homebuying, financial literacy, and wealth building programs.
“That said, credit unions understand that a significant gap remains in access to housing for moderate- to low-income and minority members,” wrote Nussle. “Credit unions are working to close this gap.”
Support Offered
The trade group offered support for several pieces of legislation that would advance credit union priorities, including:
- The Expanding Financial Access for Underserved Communities Act, which would help achieve the goal of allowing credit unions to better serve minority and disadvantaged populations
- The Homebuyers Privacy Protection Act, which would limit the use of mortgage trigger leads to credit unions and other entities that have a consumer’s authorization or an existing business relationship with a consumer
- The Housing Financial Literacy Act
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