Across the country, credit unions are playing a vital role in the U.S. economy and on our road to recovery. As a testament to the positive impact that we have on families, small businesses, and local economies, more than 96 million Americans are proud to call themselves credit union members. But in order to continue to play this imperative role, we must work together toward capital reform that will help us remain a valuable source of lending and drive the economy forward.
Why do people join credit unions? On one hand, there is the unique nature of credit unions as not-for-profit financial cooperatives, with business decisions that focus on member value and on providing consumers with affordable financial services.
It’s also because credit unions are reliable; after all, in 2009, the heart of the economic slowdown, credit unions increased first mortgage lending by $95 billion, a 35% increase. That same year, other lenders posted the largest declines in lending in more than 70 years.
Unfortunately, the capital restrictions faced by many well-managed, financially sound credit unions are making it difficult for us to meet our members’ needs. We need to remove capital restrictions in a way that preserves our unique cooperative nature.
Members of the Coalition for Credit Union Access – including me – believe that HR 719 can do just that.
Without question, the services that credit unions commonly provide – like loans to small business owners or first-time mortgages – are essential for America’s future.
But the capital restriction, which limits many credit unions to the capital we can build through our retained earnings, also limits our ability to act as a bridge to the road to recovery by making it harder for consumers and small businesses to access affordable credit in the market. These restrictions make no sense.
By providing some credit unions with access to supplemental capital, HR 719 itself will be a bridge to recovery by taking a measured approach – one that maintains the cooperative nature of credit unions and ensures that access to capital is subject to appropriate oversight.
At Bethpage Federal Credit Union, I recognize the potential that exists for us to enhance the already remarkable ways in which we serve our community. That’s why it is time for credit unions to join together in support of HR 719. With bipartisan support, and cosponsors from across the country – from California to New York and from Maine to Texas, the bill has the opportunity to boost businesses and communities from coast to coast.
Through HR 719, we have an opportunity to build a bridge to a credit union system that promotes consumer choices, drives economic recovery, and enhances our system’s ability to serve members in the future.