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WASHINGTON-While many of credit unions’ problems could be washed away if bankers would just leave them alone, they should not be credit unions’ only concern. NCUA Board Member Debbie Matz suggested that credit unions “look beyond banks and challenge other, perhaps more menacing, opponents – predatory lenders,” at CUNA’s Governmental Affairs Conference. She pointed out that there are twice as many predatory lenders as banks and credit unions combined and they are preying on potential credit union members. “Tens of thousands of check-cashers, pawnshops and payday loan outlets charge excessive fees to consumers who need quick cash to survive emergencies. Rent-to-own stores and subprime mortgage lenders lure borrowers into long-term debt at outrageous interest rates that make it almost impossible to keep up with the payments,” Matz told the 4,000 credit union representatives. The credit union community can look within itself to find inspiration, Matz noted. She pointed to Windward Community Federal Credit Union in Hawaii, which offers members an alternative to payday loans thereby eliminating payday lenders stationed outside the military base where the credit union operates. “This is very unusual,” she stated. “Drive by almost any military base throughout this country, and you’ll see predatory lenders waiting to ambush the members of our military who are often young and financially vulnerable.” The bankers’ attacks are important too, she said, assuring credit unions that, on the tax issue, “I am in your corner!” But, “While banks and credit unions are arguing in court over which communities they can serve, predatory lenders offer the most convenient financial services for nearly 100 million residents in underserved communities. While banks and credit unions are competing over people who already have accounts at insured financial institutions, predatory lenders are roping in new immigrants who find it difficult to establish relationships with banks or credit unions,” Matz said. Credit unions can serve these underserved communities by offering alternatives to Refund Anticipation Loans, like three low-income credit unions based in the poorest areas of New York City. Union Settlement, Lower East Side People’s, and Homesteaders credit unions banded together to train volunteers to aid claims for Earned Income Tax Credits. The credit unions saved taxpayers $600,000 in fees by preparing 2,600 returns for free. “This Volunteer Income Tax Assistance is available through a partnership between NCUA and IRS,” Matz explained. Providing alternatives to predatory mortgages is also a place where credit unions can step up to the plate. St. Mary’s Bank Credit Union in New Hampshire is partnering with the non-profit Manchester Neighborhood Housing Services to provide down-payment assistance for borrowers with low-to-moderate incomes, as well counseling on life skills, budgeting, and property management. At the same time, credit unions are fighting off taxation attempts by building an impressive rsum on how they differ from banks. “So when you knock out predatory lenders,” Matz said, “you will defend credit unions’ title as the undisputed consumer champion. You will build tremendous strength as you fight back against the banks and protect your tax exemption. Most important, you will make a positive impact on the lives of millions of new members.” [email protected]

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