August 24, 2014

Bynum urges more CDFI funding

July 30, 2014 – Bill Bynum, CEO of the NAFCU member Hope Federal Credit Union of Jackson, Miss., urged increased funding for the Treasury Community Development Financial Institutions Fund in a hearing Tuesday by the congressional Joint Economic Committee.

Bynum was testifying in a hearing titled "Increasing Economic Opportunity for African Americans: Local Initiatives That are Making a Difference." He stressed the need for more financial institutions in low-income and minority areas.

The credit union CEO said many banks have closed their brick-and-mortar operations in such areas, often citing a lack of traffic and noting they do offer online services for customers. However, he said once the banks' physical presence is gone, predatory payday lenders pop up to replace them.

Bynum also noted that by eliminating physical branches, the banks avoid Community Reinvestment Act requirements to invest in the areas where they are doing business. He highlighted the difference between banks and credit unions, noting the former's profit motive and credit unions' focus on service to members.

Bynum also stressed the importance of CDFIs and, when asked what is the one thing Congress could do to help low-income and minority areas, urged increased funding for CDFIs.