WASHINGTON - Declaring that the "shadow" of a growing underclass continues to mar the otherwise "bright" picture of an economy that has reduced poverty, created 20 million new jobs in 10 years, and produced the longest economic expansion in American history, NCUA Board member Yolanda Wheat told a CUNA Governmental Affairs Conference (GAC) general session February 29 that dispelling this shadow-while integrating technological advancements-would be credit unions' greatest challenge of the 21st Century.
"Credit unions will always have a corner on the market of personal service...," Wheat said, weaving a narrative that would blend themes of CU "high touch" traditions, pressing high tech opportunities, service to the underserved, and the scourge of predatory lending. "Our challenge as a nation and as a credit union movement will be to bring more and more Americans into this bright picture and to create opportunities where none previously existed."
And one of the best ways to do this, Wheat thought, was to marry the benefits of high technology with credit unions' traditions for "high touch" personal service in order to "reach out and touch" the underserved where they live.
"Capitalizing on (CUs') personal touch," Wheat said, "and (finding) their niche in a `dot-com' world will be the ultimate challenge in preparing for the future."
Credit unions, she said, have "the formidable task of extending credit union services to as many eligible consumers as possible."
"To truly fill this void," she said, exhorting attendees to voluntarily reach out to the underserved, "financial service providers have to make a commitment to bring their products, their services, and their branches directly to the community that needs them most."
In sketching out the plight of those for whom the booming American economy is still only a virtual reality, Wheat noted that there are still some 12 million families without banking or credit union services and that one-in-three of these are African-Americans. She also pointed out an educational component to this correlation in that only 20% of heads of households without a high school education have an affiliation with a bank or a credit union.
One of the consequences of this marginalization, Wheat said, was "an upsurge of predatory lending practices in our country."
Currently, Wheat disclosed, there are upward of 8,000 "payday" lenders throughout 30 states and the District of Columbia with 100 new payday lending outlets opening every month-and that the common refrain of these practitioners is that they fill a void in communities abandoned by banks and CUs with a much-needed service.
"We, at NCUA, have made a stand against predatory lenders," she said, stating that NCUA is currently compiling a computerized data base of low-income and underserved communities in the United States and will inform federal credit unions of such areas in their proximity.
"In other words," she said, "we're going to identify the communities in need. It will then be up to the credit unions to serve those communities."
"The best is yet to come," she concluded, indicating that she believed credit unions, without coercion, would rise to the challenge. -
gmcorrigan@mindspring.com
