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Good Morning! The heat is on! I think it is safe to say summer is official here. I hope everyone is able to get away and use some vacation time to relax near some water or shade! While the weather is hot, work on financial issues in Washington DC this week is not. The House is in recess this week, but committee meetings will continue, and the Senate is focusing on Endless Frontier Act which deals with scientific technology and innovation. This morning, I wanted to highlight a piece of legislation in the House entitled the Expanding Financial Access for Underserved Communities Act which is receiving strong industry support. This Act provides a market-based solution to encourage credit unions to further serve underserved and abandoned communities and promote financial inclusion by making three changes to the Federal Credit Union Act. Would allow all FCUs to add underserved areas to their field of membership (FOM). Currently only multiple common bond credit unions can do this. Exempts business loans made to businesses in low-income areas from the member business lending cap. Expands the definition of “underserved area” to include any area more than 10 miles away from the nearest financial institution branch. Credit unions have proven their commitment to expanding financial access in these underserved communities by adding more than 1,400 since 2004, while during this same time period 7,000 bank branches were closed nationally. A decrease in access to branches has been shown to harm local businesses, residents, and consumers due to reduced access to credit and affordable loan interest rates. This legislation has a long road ahead before it makes to the finish line, but we believe this is a great first step to expanding financial access and eliminating banking deserts to help the country successfully emerge from the recent pandemic. As always, don't hesitate to contact me at jkruse@dakcu.org with any questions or comments.
Good Morning!
The heat is on! I think it is safe to say summer is official here. I hope everyone is able to get away and use some vacation time to relax near some water or shade! While the weather is hot, work on financial issues in Washington DC this week is not. The House is in recess this week, but committee meetings will continue, and the Senate is focusing on Endless Frontier Act which deals with scientific technology and innovation.
This morning, I wanted to highlight a piece of legislation in the House entitled the Expanding Financial Access for Underserved Communities Act which is receiving strong industry support.
This Act provides a market-based solution to encourage credit unions to further serve underserved and abandoned communities and promote financial inclusion by making three changes to the Federal Credit Union Act.
Would allow all FCUs to add underserved areas to their field of membership (FOM). Currently only multiple common bond credit unions can do this.
Exempts business loans made to businesses in low-income areas from the member business lending cap.
Expands the definition of “underserved area” to include any area more than 10 miles away from the nearest financial institution branch.
Credit unions have proven their commitment to expanding financial access in these underserved communities by adding more than 1,400 since 2004, while during this same time period 7,000 bank branches were closed nationally. A decrease in access to branches has been shown to harm local businesses, residents, and consumers due to reduced access to credit and affordable loan interest rates.
This legislation has a long road ahead before it makes to the finish line, but we believe this is a great first step to expanding financial access and eliminating banking deserts to help the country successfully emerge from the recent pandemic.
As always, don't hesitate to contact me at jkruse@dakcu.org with any questions or comments.