financial institutions – Blog Campcee Tue, 15 Mar 2022 22:19:07 +0000 en-US hourly 1 financial institutions – Blog Campcee 32 32 FOM Modernization Enables UCs ​​to Reach Left-Behind Banks | 2022-03-15 Tue, 15 Mar 2022 22:19:07 +0000

The Expanding Financial Access for Underserved Communities Act will allow credit unions to provide financial services to more communities, often in areas that banks have abandoned or shown little interest in serving. CUNA wrote: at the leadership of the House Financial Services Committee on Tuesday. Committee Chair Maxine Waters, D-California, introduced the membership modernization legislation supported by CUNA and the League.

CUNA sent its letter in response to a March 10 letter from the American Bankers Association on the bill. CUNA’s letter notes that banks closed a network of 7,812 bank branches while credit unions opened a network of 1,439 credit union branches between January 2005 and March 2021, according to its research.

“The decrease in the number of bank branches demonstrates the profit-making approach of bankers over people when it comes to financial services,” the letter read. “The increase in the number of credit union branches demonstrates that credit unions are not only committed to providing services to communities, but also to being physically present in those communities.

“Credit unions will never apologize for our dedication and commitment to providing financial services to the most vulnerable Americans,” he adds.

Specifically, the bill:

  • Allow all federal credit unions to add underserved areas to their membership scope
  • Exempt business loans made by credit unions in underserved areas from the credit union member business loan limit.
  • Expand the definition of an underserved area to include any area more than 10 miles from the nearest branch of a financial institution.

“Any serious discussion of policy solutions to improve access to financial services for underserved or unbanked people, businesses and communities must include modernizing laws and regulations that prevent credit unions from serving those whom banks left behind,” the letter reads. “The area of ​​credit union membership restrictions and the cap on lending to member businesses excludes those who need access to traditional financial services. This legislation is not a panacea to these exclusionary policies, but it does represent a solid step forward toward financial inclusion and serving those who have been unable to access our country’s financial institutions.

Rep. Quimbo says MSMEs need more grants, not loan windows Sun, 13 Mar 2022 12:05:34 +0000

Micro, small and medium-sized enterprises (MSMEs) need more grants than financing, Marikina representative Stella Luz A. Quimbo said, citing latest state auditor’s report showing low take-up of loans offered by the government to help the sector recover from the economic impact. of the coronavirus pandemic.

“I hope that economic officials seriously consider expanding the various subsidy programs for MSMEs, such as the DTI (Ministry of Trade and Industry) Livelihood Seeding Program – Negosyo Serbisyo Sa Barangay” , Ms. Quimbo said in a statement on Friday.

“This is the way to revive small businesses and eventually give them enough confidence to benefit from the expanded loan programs. Subsidies are particularly important today, with the string of oil price hikes,” she said.

The Audit Commission report dated March 2 showed that 4.9 billion pesos, or more than half of the loans from the COVID-19 Business Restart Assistance Program (CARES), remained untapped at the end of June 2021.

Ms. Quimbo said MSMEs are generally lending risk averse while many are in the informal sector or unbanked.

“In the meantime, it would also make sense for GFIs (government financial institutions) to further streamline loan requirements and provide more efficient credit mediation services. Small businesses need to be ‘hands on’ now, so they have the courage to lend,” she said.

MSMEs make up 99.5% of the 957,620 registered establishments in the country, based on 2020 data from the Philippine Statistics Authority. — Emerald Jasper G. Tan

LSCU honors Alabama Congressman Jerry Carl as 2021 Federal Legislator of the Year – Lowndes Signal Thu, 10 Mar 2022 22:37:20 +0000

In December 2021, the League of Southeastern Credit Unions (LSCU) Board of Directors met to approve strategic plans for 2022 and discuss a number of other business items.

Among the topics of discussion were the Legislators of the Year 2021. During the nomination and approval process, Legislators’ contributions and support to credit unions were discussed at length.

The Federal Advocacy Policy Committee voted to nominate Congressman Jerry Carl (AL-01) as the 2021 Federal Legislator of the Year, which was later approved by the LSCU Board of Trustees. He was officially honored last week in Washington, D.C.

“Serving on the House Armed Services Committee, Congressman Carl has prioritized supporting our active military and veterans. In recognizing the unparalleled service and resources provided by credit unions, Congressman Carl worked to preserve the ability of credit unions to operate on military bases,” said Patrick La Pine, CEO of LSCU & Affiliates. “We are extremely grateful for Congressman Carl’s continued partnership and support of Alabama credit unions and their members.”

While the LSCU fought the IRS’ proposed reporting requirement, Congressman Carl remained adamantly opposed to the proposal from start to finish, signing several letters publicly denouncing the legislation.

In addition to his support in Washington, Congressman Carl regularly meets with district credit unions to learn more about ways he can support financial institutions.



The League of Southeastern Credit Unions & Affiliates represents 319 credit unions across Alabama, Florida and Georgia and has a combined total of over $137 billion in assets and over 10.6 million members. LSCU provides advocacy, compliance, education and training, member engagement, and communications services. For more information, visit Follow LSCU on LinkedIn, Twitter and Facebook.

Give meaning to your financial brand Mon, 07 Mar 2022 11:00:20 +0000


Quick, think of a bank or cash register announcement… What do you imagine?

A young smiling man with the keys to his new car? An older couple gardening or biking? A photo of their new mortgage officers? The sincere promise that their employees make all the difference?

How about a little less buttoned up? Maybe you’re the “fun” brand. So, you’re probably using an image of the team at a local nonprofit event, with a message about how the financial institution has been part of the community for decades.

The fact is, most financial marketers get lost in a sea of ​​similarity.

The last thing any financial marketer wants to do is take a risk on anything, especially when it comes to their marketing. The fear is that if you do something different, you won’t be recognized as a bank.

It’s normal to want to look and feel safe and trustworthy. However, safe and trustworthy without any personality will not be the way to people’s hearts.

When you say your employees really make a difference and you put your employees in every ad to help illustrate that, you end up with ads that blend in with all the other financial institutions, financial planners, real estate companies, and medical providers that do the exact same thing, with the exact same promise that their people really are the best.

So what do people really want to know more about your financial brand?

When surveyed, financial consumers say they want the basics from their financial institution: low fees, great rates and good customer service. These features are therefore central to the marketing and product development of almost every bank or credit union, because “that’s what people want”.

But there is a problem, and it is a big problem. These are the characteristics that financial institutions have educated consumers on. So when we ask about wants, consumers repeat exactly what they have been trained to assess by their banks and credit unions.

Banks are asking the wrong questions, making decisions based on the answers they’ve trained consumers to give, and then wringing their hands worrying that consumers see them simply as providers, rather than partners.

But that’s not all. Here are some sobering facts for FI leadership:

  • When asked “what is critical to your future financial success?” only one percent of participants in a FICO study mentioned their financial institution.
  • In another study, only 29% of survey respondents say they trust their financial institution to look after their long-term financial well-being, up from 43% in 2018. [2]
  • In a 2020 Accenture study, only 29% of survey respondents said they trust their financial institution to look after their long-term financial well-being, up from 43% in 2018. [3]
  • In February 2021, FICO released market research that looked at the role individuals see banks and financial services playing in their financial future. The results should make any bank executive tremble. When asked “what is critical to your future financial success?” only one percent of survey participants mentioned their financial institution. [4]
  • 70% of FICO study participants said they would be “likely” or “very likely” to open an account at a competing financial institution if they offered products and services to address these large unmet needs. ladder.

However, the way forward is clear and it all depends on the emotional connection people have with their money.

Beyond accounts, you have people who are completely invested in your brand. It’s the customers or the members who will say “oh my God, I love this bank!” when they see someone with a debit card they recognize. The people who give you a 10 on every NPS poll, would attend every annual barbecue, and might have you on their holiday card list.

These promoters can be your greatest asset, and these relationships are worth nurturing. They are the people who will help you stand up for yourself when things go wrong and promote any changes you make, if you give them the tools to do so.

But you also have detractors. And competitors. And whole new categories of people you need to attract to your IF from a massive number of options, all searchable and discoverable 24/7. No pressure, right?

What if you stopped only communicating with your brand through promotions and pricing…and thought more about what your organization stands for, how it is received, and what it should mean to your target audiences?

These are big questions, but the first step in any important strategy is to identify where growth is likely to occur. And that always pays to get back to your brand’s roots. Consider these questions:

  • What is our brand “why?” Is this something anyone in our organization, at any level, can articulate?
  • What are we defending? What should we represent? Hint: “excellent customer service” and other feature-based answers are not considered an answer here.
  • What was the reason for our last four promotions?
  • Who are we most often mistaken for?
  • What crazy ideas have we not implemented? Why didn’t we?
  • What do you find most liberating about our brand?
  • What do you find most restrictive about our brand?

Once you really start digging, the opportunities to grow your brand (and your business) become hard to miss, and the long-term results become far more valuable than a promotion or an offer.

Ready to unlock your brand’s true potential? It’s not about showing your employees and saying they’re competent and service-oriented, that’s what everyone else does.

Finding out how to understand people is always the first step.

[1] FICO® Research Infographic, What do people really want from their banks?2021

[2] Ron Shevlin, The Phantom Financial Lives of AmericansFICO/Cornerstone Advisors, 2020

[3] Making digital banking more human2020 Accenture Global Banking Consumer Study, 2020

[4] Anna Hamilton, What customers really want from their, February 10, 2021

HC3 Acquires AutoMail to Expand Statement and Communications Automation for Community Banks and Credit Unions – Thu, 03 Mar 2022 14:08:06 +0000

– Acquisition Doubles Capacity to Design, Print and Mail Critical Customer Communications for Financial Institutions and Other Industries Nationwide –

BIRMINGHAM, Alabama–(BUSINESS WIRE)–HC3, a data-driven technology company that provides customer communications, acquired Jonesboro, Ark.-based AutoMail and DOC (Document Output Center), positioning HC3 as the leading provider of mission-critical reporting and communications services for institutions financial and other regulated industries. The acquisition closed on March 1, 2022, and HC3 assumed all of AutoMail’s contract operations.

AutoMail/DOC, founded in 1997 as SynTel, helps businesses automate and reduce the expense of producing and executing statements, delivering documents, and processing tax notices.

“AutoMail/DOC has a long history of providing exceptional document and mail services to financial services organizations. As we sought an opportunity to expand our reach, their service culture and core values ​​aligned with ours,” said HC3 President Griffin McGahey. “HC3 will now serve 611 financial institutions.”

The acquisition not only increases HC3’s customer base, but also significantly expands its software team and product offering. Additional software benefits include statement presortation software, automated e4641 services, and asset verification request submissions.

“With our combined resources, HC3 is committed to serving our customers with innovation at the forefront of everything we do,” said Jeremiah James, CEO of AutoMail/DOC. “The acquisition takes the best of both companies and allows us to expand our software development team, leverage our years of combined expertise, and better serve community financial institutions.”

HC3 currently operates facilities in Birmingham, Alabama, Dallas and Indianapolis, Indiana.

About HC3

Based in Birmingham, Alabama, HC3 connects financial institutions to their customers. By outsourcing bank statements with HC3, financial institutions leverage document design, digital delivery, and print delivery. With these solutions, banks and credit unions can make a statement that reflects their brand. For more information, call (877) 838-2345 or visit


Kendall Carwile

678.781.7200 ext. 242

Fintech investment: Many roads lead to a coveted destination Tue, 22 Feb 2022 21:29:31 +0000

The days when fintechs and credit unions were seen as mortal enemies are clearly over.

For much of the 2010s, this alleged pitched battle for the hearts and minds of members was a popular storyline, portraying these brash startups as disruptors bent on bankrupting dinosaur financial institutions.

While this portrayal may sometimes be true, both sides have come to recognize the natural synergies that exist between the two.

At the 2021 NACUSO Network Conference, NCUA Board Member Rodney Hood praised the “symbiotic relationship” between these entities, particularly in creating pathways to serve digital natives.

Recent industry events, such as Finovate, have revealed an increase in start-ups actively seeking partnerships with credit unions from the podium.

As the saying goes, follow the money. Investments in fintechs in 2021 broke previous records, and credit unions played an active role.

The Curql Fund, a recently launched collective, raised $252 million in funding from credit unions and league sponsors, far exceeding its original goal of $150 million.

CMFG Ventures, the investment arm of CUNA Mutual Group, has invested over $240 million in a portfolio comprising more than 30 active fintechs.

Institutions such as the $10.8 billion asset VyStar Credit Union in Jacksonville, Florida, and the $6.2 billion asset Michigan State University Federal Credit Union (MSUFCU) in East Lansing perform large-scale direct investment strategies, taking the movement’s longstanding credit union service organization (CUSO) model to a new level.

Each of these strategies is based on a common goal: to ensure access to the latest digital solutions as quickly as possible in a form that meets the specific needs of credit unions.

While a healthy direct return on invested capital is certainly a key objective, many of the major players make it clear that their most important indicator of success will be bringing valuable technologies to market, in which case the benefits will flow directly to members. as well as through the credit union. Income statements.

The different approaches need not be propositions for credit unions, as our conversations with several leaders leading the charge clearly show.

A signal for industry

“The concept of investing is not new to credit unions, although we hadn’t used the word ‘fintech,'” says Jenny Vipperman, director of loans at Vystar. “We have Visa stocks, for example.”

Although the first official CUSO regulations were not adopted until 1987, in practice CUSOs existed much earlier. The Federal Credit Union Act of 1934 allowed credit unions to invest in organizations associated with day-to-day operations.

The NACUSO database currently lists 1,100 recognized CUSOs.

VyStar President and CEO Brian Wolfburg introduced the notion of a more programmatic approach in 2018, says Joel Swanson, director of member experience.

“We didn’t know what appetite fintech would have for investment in credit unions, so we announced our $10 million fund as a signal to the industry that VyStar wanted to partner,” he says. “Before that, I don’t think anyone was approaching this as a fund.”

The signage had the desired effect.

“I see more opportunities because they know we have this strategy,” Vipperman says. “More fintechs are reaching out to me now to share what they’re doing.”

The existence of VyStar’s fund also serves to delegate senior management to seek out opportunities.

“It makes conversations easier,” she says. “We are expected to invest, so we don’t have to seek approval for every investment. The funds are already set aside.

Two of VyStar’s main investment criteria are internal use or intent to use the product, and a clear path to a successful return.

“We first realize value through our own implementation, with additional value coming from our subsequent investment,” Vipperman says.

VyStar is also seeking representation on CUSO’s Boards of Directors. “When you’re a customer, fintechs care about you to some degree,” Swanson says, referring to comments from advisory groups and others. Naturally, an equity stake and a seat on the board of directors amplifies this voice.

Vipperman acknowledges that it also ups the ante on his own commitment. “I still share my thoughts with other credit unions on service providers, but I spend even more time doing so for our portfolio companies.”

The fund’s first investment, a $2.5 million stake in Payveris, recently generated a 220% return when the company was sold to Paymentus. VyStar has also multiplied its initial $10 million fund commitment several times over.

VyStar was the first live client on Zest AI, in which Vipperman championed a $10 million investment soon after. They have also invested $20m in Nymbus and $10m in the Curql fund, which Swanson played an early role in launching and is seen as “a version of our fund on steroids”.

“If you’re a fast follower, you’ll always be behind,” he says. “Don’t be afraid to be the first.”

While he and Vipperman acknowledge that not all credit unions are in a position to take this position, they see their own involvement in the fintech space as an opportunity for VyStar to help move the entire movement forward.


Don’t expect higher savings rates anytime soon Sun, 20 Feb 2022 14:02:00 +0000

Interest rates should start to rise this year, and that should be good news for savers, right?

Probably not right away. The Federal Reserve is expected to start raising borrowing costs in March and possibly several more times this year. But deposit rates paid to savers will likely rise at a much slower pace, analysts said. So you shouldn’t expect to see much higher rates on your emergency reserve anytime soon.

Indeed, the big banks are plentiful with cash and don’t need to raise rates quickly to attract more deposits, said Greg McBride, chief financial analyst at financial website Bankrate. “It will be long.”

That means there will continue to be a gap for some time between the rates banks pay depositors and inflation, which has been rising in recent months largely due to the pandemic.

“This is the year the gap starts to narrow,” McBride said. “But you have to have your money in the right place.”

Yet even the best rates aren’t that good. But some savers may prefer to keep their money safe, given recent stock market volatility. Here are some of the options.

McBride said smaller banks and online banks are likely to start paying better rates sooner than larger national banks. The average rate paid on basic savings accounts insured by the Federal Deposit Insurance Corp. is only 0.06%, according to Bankrate. But rates are generally higher at online banks, which don’t have to maintain physical branches. Many online banks offer rates of at least 0.5% for “high yield” savings accounts, and some offer cash bonuses, say $100 or $200, for opening accounts.

Ken Tumin, founder and publisher of the financial website DepositAccounts, said he detected a slight rise in rates, mainly on certificates of deposit, which lock in rates for a specific period, such as three months, six months, a year or more.

PenFed Credit Union offers certificate rates of 1% for 15 months and 1.25% for two years. Online banking Synchrony is offering a rate of 0.90% on a 15-month CD, and Synchrony and Marcus, Goldman Sachs’ consumer digital bank, are offering rates above 1% for five-month CDs. years.

The catch with CDs is that even though you can lock in a rate, you’re stuck with it if rates go up, and penalties apply if you withdraw your money early. If you put your money in a five-year CD, you could miss out if rates rise over the next two years. “Shorter terms are probably more attractive,” Tumin said.

At the very least, he says, before opening a CD, check the early withdrawal penalty. Depending on the details, you could come out on top if you withdraw your funds before maturity and open a higher rate CD. Take the example of a five-year CD at Live Oak Bank, a digital bank, which now pays 1.3%, with an early withdrawal penalty of six months interest. If you hold it for at least a year before cashing it out, you’ll have earned an effective rate of 0.65% for the year — “not a terrible thing,” Tumin said. But other longer-term CDs may charge penalties of a year or more.

Some banks offer CDs with more flexibility. “No penalty” CDs offer a slightly lower rate in exchange for the ability to withdraw the funds at any time, without forgoing any interest. It can be a good choice for emergency funds, which you may need to withdraw on short notice. And “additional” CDs allow you to deposit additional funds into the account mid-term. This can be a boon for people who want the higher rate of a CD but don’t have a large lump sum to contribute.

You can also consider a CD “ladder”. With this approach, you spread your funds across multiple CDs with different terms. When the shorter one matures, you can transfer the funds to a new, longer-term (and hopefully higher-rate) CD. This approach gives you more frequent access to your funds and avoids locking up all your money at lower rates.

Another option is a rewards checking account. These accounts offer higher interest rates or cash back on purchases, but can come with a host of rules and restrictions. “There are always hurdles to overcome,” Tumin said. For example, you may need to commit to making a minimum number of debit purchases each month. And many banks cap the balance on which the higher interest rate is paid.

This month, American Express began offering an online rewards checking account with no deposit or minimum transaction (maximum balance: $5 million). The account pays 0.50% and has no monthly fees or minimum debit transaction requirements. Users earn 1 membership reward point for every $2 spent. But you must already have an American Express consumer card to open the current account. And like most savings and checking accounts, the rate can change at any time.

A safe savings option that has garnered a lot of attention as inflation has surged is the I (for inflation) government bond. These savings bonds pay interest that combines a fixed base rate for the life of the bond and a floating rate, based on inflation, which resets every six months. The bonds pay an overall rate of 7.12%.

But there are a few details to pay attention to: once you’ve bought the bonds, you can’t redeem them for a year. And if you redeem them before five years, you will lose your last three months of interest.

An individual can purchase up to $10,000 in digital I bonds each year through the TreasuryDirect website. And you can buy an additional $5,000 in paper bonds using your income tax refund.

Here are some questions and answers about savings options:

Do I need to be a member of a credit union to open an account?

Credit unions are member-owned financial institutions and you usually need to register to open an account. Membership is often limited to people living in a certain area or sharing interests, such as the same employer or service in the military. But the rules have become more flexible in recent years. For example, “everyone is eligible to apply” to join PenFed, said Spencer Kenyon, a spokesperson, because it merged in 2019 with a credit union with an “open” charter. To join, all you need to do is open and maintain a basic savings account with at least $5.

I found a bank that offered higher savings rates, but I had never heard of them before. Is it safe?

Smaller regional banks and online banks are more likely to offer higher rates, but may be unfamiliar to consumers. But as long as the bank or credit union is federally insured, Tumin said, your funds are safe. The FDIC and its credit union counterpart, the National Credit Union Share Insurance Fund, protect savings deposits up to $250,000 per depositor per bank.

Banks must indicate that they are members of the FDIC. If you are unsure of a bank’s status, you can use the FDIC’s bank finder tool. Most so-called neo-banks or fintech companies are not themselves insured but partner with FDIC-insured banks to hold deposits. The FDIC recommends confirming details of how the company handles deposits. Customers should also verify the name of the bank holding the funds and confirm that it is federally insured.

Should I keep my emergency savings in a Basic Savings Account or seek higher rates?

Emergency savings should generally be kept in a liquid savings account so you can withdraw the funds quickly if you have an unexpected expense, said Kia McCallister-Young, co-director of America Saves, a Consumer Federation of America.

Depending on how much of a cushion you have saved, you can put a portion of your reserve into a higher rate certificate of deposit. But you should probably choose a shorter term CD so the funds aren’t tied up for a long time. And if you’ve struggled to build a rainy day fund, McCallister-Young said, tax time is a good time to start; you can put all or part of your refund aside to start the account.

You can also check with your employer. According to the Benefits Research Institute, about 15% of large employers offer options to help workers build up hard-day funds.

Reputable ringleader admits conspiring to rip off seven Pennsylvania banks and credit unions Sat, 19 Feb 2022 02:15:00 +0000

WILLIAMSPORT — The reputed leader of a criminal organization, according to a federal prosecutor, fraudulent banks and credit unions across the country, including Pennsylvania, pleaded guilty to conspiracy to commit bank fraud.

James Harris-Bey, 51, of the Detroit area, admitted in U.S. Intermediate District Court Friday that he ripped off seven banks and credit unions in northern Pennsylvania.

The terms of the plea agreement require him to pay restitution totaling $218,182.

He is one of three people charged so far in a scheme in which accounts at banks and credit unions were opened using forged rental contracts, paychecks and tax returns.

Assistant U.S. Attorney Alisan V. Martin, describing government evidence, said Harris-Bey and his co-conspirators made deposits using forged checks he created that contained the names of fictitious companies.

Withdrawals were then made at various branches on the same day before the financial institutions could reconcile the accounts.

On October 25, 2019, withdrawals of $1,552 each were made at seven First Citizens Community Bank branches after counterfeit checks were allegedly deposited by Horizon Medical Home Care.

Harris-Bey used women posing as home nurses to withdraw funds.

Peter Douglas, 41, and Jaunea Waller-Bey, 36, both of Detroit, are also accused of taking people posing as traveling nurses to their homes at banks. They are awaiting trial for bank fraud.

Harris-Bey was arrested March 23 in Mississippi and said at arraignment that he was heading to Arizona to be with his wife.

Martin disputed that claim, alleging he traveled through Mississippi, Louisiana and Tennessee to target banks in those states.

Check printing software was found in his vehicle. Laptops and a printer were seized and a scan of his cellphones revealed he was leading the co-conspirator movement, she said.

The criminal activity Harris-Bey has been accused of began less than three months after the end of an 80-month federal sentence in Ohio under a similar check cashing scheme in which he was to return $765,112.

With some reluctance, Judge Matthew W. Brann released Harris-Bey on personal recognizance into the custody of his sister in Detroit with the warning that if he stepped out of line he would be back in jail.

It will be easier for Harris-Bey to work through her diabetes-related medical issues without being in jail, deputy public defender Gerald Lord explained.

The reasons given for keeping him in custody so far included a significant history of convictions for fraud, as well as charges of assault with intent to commit murder in 1990, providing false information to a police officer in 1994 and escape and escape in 2006.

National Crime Information Center records list 25 aliases and six dates of birth for him.

Hope Credit Union’s Bynum Testifies in Support of CDFIs and MDIs | 2022-02-16 Thu, 17 Feb 2022 02:41:06 +0000

Mission-driven community development financial institutions (CDFIs) and minority deposit-taking institutions (MDIs) have transformative potential, HOPE CEO Bill Bynum told members of the House Financial Services Committee on Wednesday. . Bynum testified for a hearing on CDFIs and MDIs, and CUNA also submitted a letter for the hearing file.

HOPE includes Hope Credit Union, Hope Enterprise Corporation and Hope Policy Institute.

“In normal times, and even more so in times of crisis, HOPE has been guided by a simple premise: when given the opportunity and access to the right tools, people can climb the economic ladder,” Bynum said. . “Mission-driven CDFIs and MDIs, like HOPE, are on the front lines of providing vital tools and opportunities to people and communities too often overlooked.”

Bynum noted that — of Hope’s 35,000 credit union members — 69 percent have household incomes below $45,000 and eight in 10 are people of color.

He also said Hope played a leadership role in organizing CDFIs, MDIs and others to successfully advocate for changes to the Paycheck Protection Program to secure additional funds. to community lenders.

Hope has made 5,216 PPP loans, 89% to borrowers of color and 50% to women. The average loan size was $26,814, more than $40,000 less than the program’s national average.

Of Hope’s $140 million in PPP loans, 98% of loans were for amounts less than $150,000 and more than 3,500 loans were for sole proprietorships (96% of Black-owned businesses in the Deep South are sole proprietors).

CUNA highlighted how MDIs and CDFIs help serve their communities and called on Congress to help increase financial inclusion.

“Under current law, only multiple common bond credit unions are eligible to add underserved areas to their membership area. In addition, credit unions are also arbitrarily limited in the amount of business loans they can provide to 12.25% of assets,” the letter states. “Removing this cap would allow small businesses to access the capital they need.

“CUNA strongly supports the Expanding Financial Access for Underserved Communities Act, which would allow all federal credit unions to add underserved areas to their membership scope and exempt loans to businesses made by credit unions in low-income areas from the ceiling on loans to member businesses of credit unions.” He adds. “In addition, the legislation expands the definition of a low-income credit union to include any area more than 10 miles from the nearest branch of a financial institution.”

The CFPB tries to limit innovation and consumer choice Tue, 15 Feb 2022 19:03:57 +0000

In the United States, thousands of banks, credit unions and fintech companies are vying for business and consumer trust. U.S. consumers benefit from a highly competitive marketplace when it comes to selecting the banking services that meet their needs and are empowered to make informed decisions about how much they should pay for a checking account feature like overdraft protection or benefits that a specific credit card might offer.

Against this backdrop, it is all the more disconcerting that earlier this year the Consumer Financial Protection Bureau (CFPB) seemed to suggest some surprise that financial service providers charge for the products they provide to consumers. . In a recent Request for Information (RFI) and accompanying series of blog posts, the CFPB suggests that consumers of financial products are the unwitting victims of fees charged to them by service providers.

The RFI published in the Federal Register is officially titled “Request for Information Regarding Fees Charged by Providers of Consumer Financial Products or Services,” but the agency’s press release and related blog posts suggest that it is more than a neutral information-gathering exercise. Instead, they use threatening phrases like “operating revenue streams” to suggest that all companies profit from consumers or somehow break the law. This is not the case.

With regard to consumer protection, existing laws and regulations ensure that consumers receive accurate and timely information, including a schedule of fees. The Truth in Lending Act, for example, requires disclosure of the terms and cost of credit products, while the Truth in Savings Act requires certain uniform information about fees and interest when banks open a deposit account for a customer. .

The financial services market is highly competitive

There is little evidence to suggest that consumers are not enjoying the benefits of vigorous competition in the financial services market. According to the CFPB of January 2021 Federal Consumer Financial Law Report Task Force, the consumer credit market “has seen new entrants, innovative products, overall growth, the reinvention of incumbents, and the decline or exit of companies that could not keep pace with others. These are the characteristics of competitive markets.

Another confusing statement from the CFPB is their description of certain fees as “quasi-mandatory”. This seems to suggest that the Bureau is not comfortable with any fees charged. This type of thinking demonstrates a complete misunderstanding of the financial services market and business more broadly by neglecting overhead costs, including but not limited to service development, marketing (which can be extremely costly in a competitive) and the infrastructure, including customer service, that makes the products work.

If the CFPB wants to help consumers, it must precisely identify their concerns. Throwing out wide scatters that accuse law-abiding companies of wrongdoing diverts attention from illegal activity that should be addressed. The business community is committed to protecting consumers – we cannot help identify bad actors if the CFPB avoids saying what the illegal activity is.

The CFPB is meant to empower consumers to make informed choices, not choose for them. This so-called RFI is an attempt to force banks and financial institutions to limit consumer choice and will only stifle innovation and competition in the financial services industry. The ultimate question, which the CFPB ignores, is which services will disappear if providers cannot cover the costs and will the consumer be better off?

About the authors

Bill Hulse

Vice President, Center for Competitive Capital Markets

Bill Hulse is vice president of the Center for Capital Markets Competitiveness at the United States Chamber of Commerce.

Read more