The New York Credit Union Association joined with CUNA and other Leagues around the country in signing a letter in support of the Expanding Financial Access to Underserved Communities Act (H.R. 7003). The bill was introduced in March by U.S. Rep. Maxine Waters (D-CA), chair of the House Financial Services Committee, and, according to CUNA, the committee is expected to mark up the legislation starting today.
The letter, sent to Waters and U.S. Rep. Patrick McHenry (R-NC), ranking member of the committee, on May 16, states the legislation will enable credit unions to provide financial services to more communities in need, often in areas banks have abandoned or shown little interest in serving.
“We place field of membership reform among our top issues of concern because the current system is unnecessarily cumbersome and restricts credit unions’ ability to improve their members’ financial well-being and advance the communities they serve,” the letter states. “The archaic field of membership restrictions to which credit unions are subject are antithetical to the goal of financial inclusion and economic equity, and they impede credit unions more fully fulfilling their statutory mission to promote thrift and provide access to credit for provident purposes.”
According to CUNA, H.R. 7003:
- Protects consumers from payday lenders. Credit unions have a 400% lower APR on short-term loans vs. predatory payday loan companies, connecting low-income consumers with solutions to financial emergencies without trapping them in cycles of debt.
- Expands homeownership for traditionally underserved and marginalized communities. Credit unions support their member-owners’ financial success and are more likely to find a mortgage that works for one’s personal circumstances.
- Grows CDFI-designated credit unions’ service. 35% of credit unions are in CDFI investment areas. Bringing their specialized focus and tools to underserved communities will create opportunities with generational benefits.
- Increases capital for minority-owned businesses. For entrepreneurs in underserved areas, access to credit union capital will mean more growth, more jobs, and a long- term investment in communities across the country.
Passing the legislation means more affordable mortgages for families on the cusp of homeownership, lower barriers to entry for entrepreneurs building their American dream and better access to the car that gets them to school, work and beyond, according to CUNA.