2nd Hearing on CU Bill Addresses Unbanked and Underserved

(Top-to-bottom): Rep. Brad Sherman (D-CA) and John Berlau, senior fellow at the Competitive Enterprise Institute
(Top-to-bottom): Rep. Brad Sherman (D-CA) and John Berlau, senior fellow at the Competitive Enterprise Institute

On Wednesday, the Subcommittee on Financial Institutions of the House Financial Services Committee convened a hearing on financial inclusion on Capitol Hill in Washington, D.C. The objective was to examine private and public sector solutions surrounding America’s unbanked problem.

Three bills were listed for discussion, including a bill supported by the California and Nevada Credit Union Leagues and the Credit Union National Association (CUNA) — the Expanding Financial Access for Underserved Communities Act. The other two proposals were regarding postal and public bank options, which CUNA and the Leagues oppose.

Of the four witnesses, three urged support on the public sector proposals. One from the Competitive Enterprise Institute opposed any public sector option, while supporting the credit union proposal.

The legislation by the Leagues and CUNA would allow credit unions to serve investment areas according to the Community Development Financial Institutions Fund (CDFI Fund), poverty zones, and any rural community 10 miles from the closest financial institution.

During the hearing, Rep. Brad Sherman (D-Sherman Oaks) made the specific point that credit unions' field-of-membership bill allowed for greater access in rural and underserved communities, especially markets where distance becomes an access problem. Several members of Congress on both sides of the aisle expressed support for allowing credit unions greater access to underserved communities, as both a market-based solution and one with a proven track record.

There were considerable conversations about low-income and rural communities, and the real-life cost of overdraft fees as well as payday lenders.

"This was the second hearing of our proposal, which should be introduced in the weeks ahead," said Jeremy Empol, vice president of federal government affairs for the Leagues. "With House Financial Services Committee Chairwoman Maxine Waters' support, the Leagues and CUNA continue to promote this bill and prepare for action."

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