Credit unions—not post offices—are the answer to increasing financial services for those underserved by financial institutions, credit union trade groups said, responding to a proposal by two high-profile members of Congress.
Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) last week unveiled a proposal to cap interest rates on consumer credit at 15% and to allow post offices to provide basic financial services.
“There is no need to pass legislation requiring the [Postal Service] to provide products and services it wasn’t designed to provide,” CUNA President/CEO Jim Nussle wrote the two lawmakers.
In announcing their proposal, the two praised credit unions for offering financial products at reasonable interest rates.
NCUA has set an 18% for most consumer credit offered by credit unions.
“NAFCU is pleased that Sen. Sanders and Representative Ocasio-Cortez recognize the unique nature of credit unions and that we are different than banks in their usury ceiling proposal,” Brad Thaler, NAFCU’s vice president of legislative affairs said.
NAFCU and CUNA oppose postal banking
The groups have said that expanding credit union fields of membership to allow them to serve underserved areas would help increase access to financial services.
“If the door to a credit union was open a bit wider, then the underserved and unbanked would be a lot better off,” Nussle wrote.
And the American Bankers Association blasted the proposal as well.
“Today consumers benefit from a highly competitive and vibrant credit market,” said ABA Senior Vice President Jeff Sigmund. “It would be a mistake for the government to artificially limit those choices.”