WOCCU Will Weigh In on G-20 Financial Inclusion Plans
World Council of Credit Unions has been invited to comment on a G-20 proposal to increase financial services access to the world's poor.
The Access Through Innovation sub-group of G-20's Financial Inclusion Expert Group, created during the 2009 Pittsburgh summit, will examine and recommend new financial services methodologies for the world's poor. The sub-group's co-chairs have asked for WOCCU's input on the draft principles for innovative financial inclusion.
"After consulting with our members, we believe the draft principles don't go far enough to ensure that credit unions worldwide can access critical payment systems, card networks, central bank lending facilities and deposit insurance systems to offer innovative and inclusive products," said David Grace, vice president of association services.
"WOCCU's work to expand access to financial services by providing reloadable debit cards, ATMs and mobile banking services to credit unions would be significantly streamlined if credit unions could access these core central banking services," he said.
In a letter to the sub-group's co-chairs, Grace stressed several changes to the proposed nine principles, which focus on technology, education and responsible oversight as ways to increase consumer access to financial services. WOCCU said its recommendations better articulate the opportunity for credit unions to participate in providing these services.
Grace recommended that principle two, which focuses on diversity of products, also contain the following clarification to promote diversity of institutional types and credit union involvement: "Implement policy approaches that provide incentives for sustainable financial access through various types of financial institutions and usage of a broad range of services (savings, credit, payments and transfers, insurance)."
WOCCU also recommended the inclusion of a tenth principle, which would provide equality for all prudentially supervised institutions to directly access payment systems, lender-of-last-resort facilities, deposit insurance and card networks. Such access would enable both banking and nonbanking financial institutions to offer a broad set of services to the financially excluded.
"The addition of this principle will ensure that nonbanking financial institutions, which often are the primary providers of services to the financially excluded, can offer safe and sound services comparable to those offered by the banking sector," Grace wrote in the letter.
The Access Through Innovation sub-group will present the final principles for consideration by G-20 ministers of finance when they meet June 25-27 in Toronto.