Credit unions are the alternative to the profit-driven model of commercial banking, CUNA wrote to the House Financial Services Committee Wednesday. The committee conducted a hearing on megabank consumer abuses, most notably Wells Fargo, and CUNA submitted its letter for the record.
“The importance of having not-for-profit credit unions as vibrant and viable alternatives in the financial services marketplace is as significant today as it has ever been,” the letter reads. “The fact that this hearing is happening at all provides ample evidence of the need for this alternative in the marketplace. Credit unions provide accessible and affordable basic financial services to people of all means and encourage the equitable distribution of capital across all individuals, families, communities and small businesses.”
The letter also illustrates key differences between credit unions and banks and notes the $16.4 billion in consumer benefits realized in 2018 by credit union members and non-members alike.
It also addresses the effect of past rulemakings from the Consumer Financial Protection Bureau (CFPB) that have had negative impacts on consumer access to financial services.
“Credit unions are the original consumer financial protectors. Because of their not-for-profit, member-owned cooperative structure, credit unions are not subject to the same revenue-driven motives that are characteristic of for-profit financial services providers,” the letter reads. “Instead, credit unions’ member-centric focus means they approach their members differently than other market participants approach their customers.
"Consumers lose when one-size-fits-all rules force credit unions to pull back safe and affordable options from the market, pushing consumers into the arms of entities engaged in the very activity the rules were designed to curtail,” it adds.