Credit unions combat inequities through financial inclusion

February 27, 2022

The heart of the credit union mission is confronting inequities through financial inclusion, CUNA Director of Advocacy Abigail Truhart wrote Friday in Credit Union Times.

“CUNA works tirelessly to ensure policymakers know that as not-for-profit, member-owned financial cooperatives, credit unions are laser-focused on advancing financial inclusion and equity in the communities we serve,” she writes. “CUNA has proudly supported efforts to increase funding for Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs), eliminate barriers for the LGBTQ+ community, and ensure women and minority-owned businesses have access to capital without being squeezed by regulatory red tape.”

She also notes CUNA’s strong support of draft legislation—the Expanding Financial Access for Underserved Communities Act—which would allow federal credit unions to add underserved areas to their field of membership and exempt business loans in low-income areas from the arbitrary member business lending cap.

It would also expand the definition of a low-income credit union to include any area that is more than 10 miles from the nearest branch of a financial institution.

“Credit unions’ outdated field of membership restrictions and the member business lending cap shut out those who most need access to mainstream financial services,” Truhart writes. “At this pivotal time, when our nation must face the reality that the pandemic has disproportionally affected underserved and communities of color, CUNA strongly believes this legislation takes significant steps forward in addressing financial inclusion for all Americans.”

She added that—looking beyond the pandemic—access to capital will be critical to ensuring the survival of vulnerable small businesses, and roughly 80% of credit union business loans currently are loans banks would not make.