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WASHINGTON-The House Subcommittee hearing that bumped NCUA’s monthly board meeting to the afternoon provided credit union industry representatives the opportunity to showcase the community’s various efforts to bring more consumers into the financial mainstream. NCUA Chairman Dennis Dollar told the House Financial Institutions and Consumer Credit Subcommittee last week about the successes of the agency’s Access Across America program. “NCUA has initiated a number of successful efforts throughout its history which were designed to extend lower cost financial services to more underserved individuals through member-owned, not-for-profit financial cooperatives. We want to see more of the `unbanked’ be empowered to `bank’ themselves through the self-help approach member-owned credit unions can provide,” he explained. According to a subcommittee press release, as many as 10 million are unbanked in America. “Many consumers shy away from traditional banking institutions because of mistrust of the banking system, legal or documentation issues, impaired credit or limited knowledge of how banks operate, what might be called lack of financial literacy. It makes both business and moral sense to make an enthusiastic effort to reach these citizens,” Subcommittee Chairman Spencer Bachus (R-Ala.) said. The hearing was held at the behest of subcommittee member Ruben Hinojosa (D-Texas) from issues that arose out of the markup of the financial services regulatory relief legislation. Dollar, who testified on the first panel with Treasury Assistant Secretary for Financial Institutions Wayne Abernathy, continued on to discuss how credit unions attempt to pull some of the unbanked away from fringe financial service providers. “We recognize that many residents of underserved neighborhoods find themselves in a vicious pawnshop/payday lender cycle that can only be broken when they have access to the lower cost and user-friendly alternatives provided by traditional financial institutions,” he said. Access Across America, Dollar said, has helped to bring nearly 20 million residents in underserved areas into credit union fields of membership. In addition, these consumers are joining the credit unions he emphasized. A recent look at NCUA Call Reports found that credit unions that had adopted underserved areas grew 4.80%, well above the national average of 2.49%. That is a rate 93% faster than the national average, the chairman pointed out. “Not only are the residents taking advantage of the access extended to them through this initiative, but credit unions are finding that there is good business in these communities as long as there is proper due diligence and risk management in place,” Dollar said. Congresswoman Maxine Waters (D-CA) expressed her support for the program and offered to do appearances to help promote it. Also testifying at the hearing was Al Beltran, president and CEO of Security First Federal Credit Union (McCallan, Texas) on behalf of CUNA. The CEO of the $137 million credit union with 21,000 members is a Hinojosa constituent. Beltran noted CUNA and the World Council of Credit Unions’ recognition of the “desperate need for affordable remittance services” and participation in the IRnet. “This service saves our users at least one-third the cost of using a high-cost money transfer agent,” he said. He added that CUNA was highly concerned about efforts to discredit the matricula consular identification card and strongly supported H.R. 773, The 21st Century Access to Banking Act. CUNA is also heavily involved in financial literacy efforts, Beltran explained. “Credit unions recognize that it is necessary to offer some form of financial literacy training to successfully integrate the `unbanked’ into the financial mainstream,” he said. He said that Security First FCU and other credit unions offer one-on-one training and work with area schools. Beltran highlighted CUNA’s work with the National Endowment for Financial Education. He concluded, “Whether it is through the First Accounts program, affordable housing programs, enhanced IDAs, expanded opportunities to serve their communities or financial literacy, credit unions stand ready to meet this very important challenge.” Minority-owned Citizens Trust Bank of Georgia, Operation Hope, and other groups were also represented at the hearing. [email protected]

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