Credit unions ‘fit local economic terrain,’ CFPB recognizes
Credit unions are among the institutions that offer products and services to fit their communities, the Consumer Financial Protection Bureau (CFPB) wrote in a report released Tuesday on challenges facing rural communities.
“Local financial institutions, such as community banks and credit unions, often offer products and services that fit the local economic terrain,” a release reads. “However, rural communities are experiencing a fast-paced exodus of in-person banking services, with rural communities 10 times more likely than urban communities to be located in banking deserts. In fact, the Federal Reserve has identified more than 2,100 existing and potential banking deserts across the country with more than 1,500 located in rural areas.”
CUNA, Leagues, and credit unions strongly support the Expanding Financial Access for Underserved Communities Act (H.R. 7003) that would allow credit unions to directly add financial deserts to their fields of membership.
H.R. 7003 would:
- Allow all federal credit unions to add underserved areas to their field of membership
- Exempt business loans made by credit unions in underserved areas from the credit union member business lending cap.
- Expand the definition of an underserved area to include any area that is more than 10 miles from the nearest branch of a financial institution.
CUNA research shows banks closed a net of 7,812 bank branches while credit unions opened a net of 1,439 credit union branches between January 2005 and March 2021.