PARIS—A greater emphasis on consumer protection and education are necessary for financial service providers to bring higher levels of integrity to their processes and policies, according to Brian Branch, executive vice president and COO for World Council of Credit Unions (WOCCU). A strong orientation toward consumer service is especially critical to help slow economic market decline during the current global crisis, Branch told a group of more than 250 policymakers and executives participating in a roundtable discussion sponsored by the Organization for Economic Cooperation and Development (OECD).
OECD's corporate responsibility roundtable, which convened in conjunction with the organization's annual conference, this year focused on multinational companies' obligations to consumers. Branch guided Monday's roundtable, comprised of representatives from 30 OECD member nations, through criteria credit unions use to define member service. Education, integrity and an emphasis on meeting member needs constitute the credit union approach, one that puts people before profits, he explained.
"Credit unions safeguard consumer interests in terms of quality, price and safety," Branch said. "Providing financial services in ways that do no harm and improve consumers' economic wellbeing and prosperity have helped credit unions, communities and even countries grow."
Increased integrity comes into play among institutions that provide services reaching beyond the dictates of statutory requirements. Consumer demand for greater transparency, including fee and interest rate disclosures, will help drive greater ethical practices among financial institutions worldwide, a position Branch urged policymakers to implement within their own countries.
"Thanks to the Internet, there is greater access today to financial information, which creates the demand for greater transparency," Branch said. "However, an ongoing lack of financial literacy among consumers can increase household debt, which eventually puts a strain on financial providers and affects the markets they serve. Stronger efforts to educate and protect consumers will result in better conditions for all."
Branch cited WOCCU's International Credit Union Consumer Protection Principles as a barometer to measure financial institutions' consumer service initiatives. By following principles such as rate and fee disclosure, fair credit practices, dignified collection procedures, non-deceptive advertising, increased financial education and other standards, financial institutions can develop ethical service platforms focused on consumer needs, thereby improving service performances in ways that help both the institution and the individuals it serves, according to Branch.
"The fact that OECD called on WOCCU to lead the discussion in this area speaks to their understanding of the importance of the credit union model," Branch added. "The positive response received from roundtable participants indicates that more people have come to appreciate what financial cooperatives can do for members."
Founded in 1961, OECD brings together countries committed to democracy and participation in a free-market economy to find better ways to boost employment and financial growth, create economic stability, raise living standards and contribute to growth in world trade. Paris-based OECD provides a setting for its 30 member governments to compare experiences, coordinate policy, identify best practices and seek solutions to common problems.
For a complete copy of WOCCU's International Credit Union Consumer Protection Principles, visit www.woccu.org/bestpractices.
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.