PEWAUKEE, Wis., March 5 /PRNewswire-USNewswire/ — “It’s nothing but the same old broken record. What banks are doing is deflecting attention from their own failures by distorting facts about credit unions,” says Brett Thompson, President & CEO of The Wisconsin Credit Union League, reacting to the Wisconsin Bankers Association’s (WBA) support for an amended bill that would subject large credit unions to the same regulations banks must follow for their failure to meet financial needs in their communities, particularly those of low-income customers.
“Not one valid study has ever cited locally owned credit unions – whose purpose is to serve their members, not make profits – for failure to fulfill their mission, and that includes the largest credit unions,” Thompson adds.
“Banks want to heap costly regulations on credit unions at taxpayers’ expense, with no documented need for doing so,” Thompson says. “Credit unions are restricted to serving only eligible members, and they’ve done a great job doing just that. The WBA completely ignores the evidence that attests to this, including the $176 million that Wisconsin credit unions return to their 2.1 million members annually in lower rates on loans, higher rates on deposits and lower or fewer fees. Consumers already reap these benefits from credit unions without CRA.”
Yet the WBA continues to point to studies of credit unions that were shown to be statistically flawed or inconclusive to mislead lawmakers and deflect attention from banks’ failure to satisfy the spirit of the Community Reinvestment Act (CRA), a federal law compelling banks to better serve areas from which they take deposits. Credit unions have done a better job than banks satisfying the spirit of that law, despite the fact that it never applied to credit unions. The law was never applied to credit unions because the member-owned co-ops exist to serve members, not make profits.
Federal data shows that Wisconsin credit unions approve a significantly higher percentage of mortgage applications from low-income and minority consumers than the state’s non-credit union lenders. Credit unions also operate close to 40 percent of financial institutions in low-income census tracts while most banks – 94% of them – are largely absent from these areas. Regulators have applauded credit unions for their payday loan alternatives that have saved consumers more than $1 million, free checking with no minimum balance requirements, free ATMs, small “unprofitable” loans, financial education, and lower and fewer fees. Wisconsin credit unions annually save their members more than $59 million dollars in fees. In contrast, a Government Accountability Office study released this week reported a troublesome increase in banks’ overdraft fees, which alone increased to $17.5 billion a year – costs which predominantly affect low-income customers.
“Regardless of their size or who they serve, Wisconsin credit unions are delivering the benefits they were designed to provide. Costly regulation is a needless solution to a non-existent problem,” Thompson says.
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Source: Wisconsin Credit Union League
