Legislation Would Let More Credit Unions Serve The Underserved

A bill introduced in Congress last week would allow credit unions – regardless of charter – to boost their membership efforts and rosters to include underserved communities across the United States.

According to American Banker, the bill, introduced by House Reps. Gwen Moore, Democrat of Wisconsin and Paul Cook, Republican of California, would let the unions add those communities as long as they can prove both intent and ability to serve. They must also present business plans to the National Credit Union Administration showing how those efforts would unfold. Annual updates would be mandated as well.

At a June 2017 hearing of the Senate Banking Committee, NCUA chairman J. Mark McWatters endorsed the plan, stating that “allowing federal credit unions with a community or single common-bond charter the opportunity to add underserved areas would open up access for many more unbanked and underbanked households to credit union membership.”

Under the current practice, credit unions with multiple common bond charters can expand their membership to include underserved communities.

The Banker noted that the bill may have “favorable” chance of passage, as Congress is likely to pass a regulatory reform package next year – and credit unions will move to have the most recent bill be included as part of any regulatory reform offering as it moves through Congress.

In a statement that came after the bill was announced, Dan Berger, president and CEO of the National Association of Federally Insured Credit Unions, said that “we appreciate Representatives Moore and Cook’s efforts to remove barriers that limit consumers’ access to the financial services that they need.”

Moore, who serves on the House Financial Services Committee, told the Association that “current rules are tremendously outdated and only allow credit unions to serve certain demographic areas.”