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Senators talk rural economy, importance of CDFIs, disruptions posed by fintechs, more
NAFCU Tuesday monitored the Senate Banking Committee's hearing to examine the economy of rural areas during which Bill Bynum, president and CEO of NAFCU-member Hope Credit Union located in Jackson, Miss., testified before the committee and offered the credit union perspective. During his testimony, Bynum stressed the need for further funding for community development financial institutions (CDFIs) and expanded access to financial services in rural areas.
NAFCU Vice President of Legislative Affairs Brad Thaler wrote to the committee ahead of the hearing to urge the committee to support a change to the Federal Credit Union Act that would allow all types of credit unions to add underserved areas to their field of membership.
The letter also highlighted a recent report from the Federal Reserve which found that between 2012-2019 credit unions grew their branch presence in rural areas by 2 percent, while branch presence among both community banks and larger banks declined. During the hearing, Chairman Sherrod Brown, D-Ohio, criticized bigger banks for leaving rural areas and noted a lack of access to financial services and a lack of rural broadband.
Chairman Brown asked Bynum what Congress and the Biden administration should do to help low-income families become part of the middle class, to which Bynum explained that help is needed to facilitate secure mortgages that will help build housing ownership in rural areas and promote generational wealth. This topic was stressed by several witnesses.
In addition, Sen. Bill Hagerty, R-Tenn., asked Bynum what can be done to expand on the partnership between CDFIs and the government. Bynum responded that he believes CDFIs with a strong track record of success need more support and funding. Bynum again stressed his point of home ownership being the “key to economic security.”
On the topic of fintech, Sen. Chris Van Hollen, D-Md., asked Bynum about the disruption that fintechs pose on the financial service industry. Bynum stressed the predatory nature of some fintechs and called on the committee to support legislation that ‘cracks down’ on fintech banks that are exploiting regulatory loopholes.
NAFCU is leading efforts with regulators and lawmakers to ensure these fintech loopholes are addressed; visit the association’s new issue advocacy page for more on this topic.