WASHINGTON — A spotlight shone on credit unions' success with international remittance services on May 17 when a CUNA executive explained to a subcommittee of the House Financial Services Committee how providing the services benefits the immigrants, their families in their home countries and the credit unions themselves.
CUNA Vice President David Grace testified on behalf of CUNA and the World Council of Credit Unions before the Subcommittee on Domestic and International Monetary Policy.
"WOCCU's research…shows that without remittances, 62% of remittance receivers in Guatemalan credit unions would have very little income and 40% would be living on less than $1 per day," Grace said in prepared testimony. "As a result of receiving remittances through a credit union, over 60% of these consumers had incomes above the gross national income per capita in Guatemala of $2,400."
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"Our most recent work on the ground in rural Guatemala with USAID indicates that remittance receivers in the heaviest migration zones have unmet needs for additional financial services," he continued. "Credit unions' experimentation with remittance linked products shows that consumers are interested in remittance backed home loans and micro-enterprise loans and to a lesser extent, direct deposit or remittances."
Grace praised previous legislation allowing CUs to offer remittance services within their field of membership and noted that has helped lower remittance prices by making CUs competitive with other
remittance providers.
"We are now seeing increased remittance volumes sent by U.S. credit unions and innovations in the market. For example, the largest credit union in South Carolina has decided to offer free remittances to any new members. Many other credit unions are incorporating remittances into larger service offerings including tax preparation support and first time mortgages for new Americans," Grace said.
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