FOM reform would help CUs reach more than 1 million
Allowing credit unions to expand into rural communities and other underserved areas would advance communities throughout the nation, CUNA wrote to the Senate Banking, Housing, and Urban Affairs Committee Tuesday. The committee conducted a hearing on investing in rural communities, which also featured testimony from Bill Bynum, president/CEO of Hope CU, Jackson, Miss.
"One of the most important things that Congress could do is empower rural communities through financial inclusion. That means ensuring that federal law permits all federal credit unions to serve rural communities, banking deserts, and all underserved areas,” the letter reads. “Given the unprecedented economic disruption caused by COVID-19, it is important now more than ever that rural communities have access to a trusted, local financial partner. Credit unions are eager to be that partner, but archaic charter and field of membership restrictions prevent most from expanding more broadly to help those who are most in need.
“Under current law, only multiple common bond credit unions are eligible to add underserved areas, including rural communities to their field of membership,” it adds. “If the policy goal is to ensure that all have access to affordable financial services, then the policy should not restrict a subset of member-owned, not-for-profit financial institutions from providing service to these communities.”
CUNA estimates that this reform of field of membership rules would produce first-year benefits for more than a million consumers who “now have no realistic, affordable options in the financial marketplace.”