Home > Newsroom > News Releases

November 22, 2014   

Newsroom // News Releases

April 30, 2010


Broaden Financial Innovation Capabilities to Include CUs, WOCCU Urges G-20 Subgroup

Recommendations Will Be Considered at Toronto Meeting in June

Print Email RSS Comments

MADISON, Wis. — Leaders from the Group of 20 (G-20) nations would like to see the global poor receive greater access to financial services through safe and sound modes of service delivery administered worldwide. World Council of Credit Unions (WOCCU) has been invited to comment on the G-20's proposal to assure that credit unions are effectively represented and empowered to help fulfill the committee's recommendations.

The G-20 at its 2009 Pittsburgh Summit appointed the Access Through Innovation sub-group of its Financial Inclusion Expert Group to examine and recommend new methodologies to provide the world's poor with financial services. The sub-group's co-chairs have asked for WOCCU's input on the draft Principles for Innovative Financial Inclusion, a plan that the organization's members do not believe fully enables credit unions to effectively fulfill this mission, according to Dave Grace, WOCCU vice president of association services.

"After consulting with our members, we believe the draft principles don't go far enough to ensure that credit unions worldwide can access critical payment systems, card networks, central bank lending facilities and deposit insurance systems to offer innovative and inclusive products," said Grace. "WOCCU's work to expand access to financial services by providing reloadable debit cards, ATMs and mobile banking services to credit unions would be significantly streamlined if credit unions could access these core central banking services."

In an April 28 letter to sub-group co-chairs Paul Flanagan, general manager of the Australian Treasury's international finance division, and Luis Mansur, deputy head of Banco Central do Brasil's external debt and international relations department, Grace stressed several changes to the proposed nine principles, which focus on technology, education and responsible oversight as ways to increase consumer access to financial services. WOCCU's recommendations better articulate the opportunity for credit unions to participate in providing these services.

In the letter, WOCCU recommends that principle two, which focuses on diversity of products, also contain the following clarification to promote diversity of institutional types and credit union involvement (recommendation in Italics): "Implement policy approaches that provide incentives for sustainable financial access through various types of financial institutions, and usage of a broad range of services (savings, credit, payments and transfers, insurance)."

WOCCU also advocates for the inclusion of a tenth principle, outlined as follows:

Equality: Allow all prudentially supervised institutions to directly access payment systems, lender-of-last-resort facilities, deposit insurance and card networks, which will enable both banking and non-banking financial institutions to offer a broad set of services to the financially excluded.

"The addition of this principle will ensure that non-banking financial institutions, which often are the primary providers of services to the financially excluded, can offer safe and sound services comparable to those offered by the banking sector," the letter explained. "Today, one-third of credit unions globally have direct access to payment systems and less than half have access to deposit insurance systems. Without such access, innovations will be limited, costs will be higher and depositor security will be sub-optimal."

In meetings last month with the Financial Stability Board in Basel, Switzerland, a WOCCU delegation put forward a similar agenda. The Access Through Innovation sub-group will present the final Principles for Innovative Financial Inclusion for consideration by the G-20 ministers of finance when they meet June 25-27 in Toronto.




World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.

World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 57,000 credit unions in 103 countries serve 208 million people. Learn more about World Council's impact around the world at www.woccu.org.

 



Contact: Rebecca Carpenter
Organization: World Council of Credit Unions
E-mail: rcarpenter@woccu.org
Phone: +1-608-395-2031
Print Email RSS Comments