House Domestic and International Monetary Policy, Trade, and Technology
Subcommittee Chairman Luis Gutierrez (D-Ill.) thanked credit unions for
providing low-cost financial alternatives. Photo courtesy of CUNA.
Washington, DC—During a hearing to
investigate Americans' access to remittance
services, Rep. Luis Gutierrez (D-Ill.) thanked
credit unions for what they do to provide
services to citizens who have difficulty gaining
access to mainstream financial services.
Gutierrez, who is chairman of the House
Financial Services subcommittee on domestic and
international monetary policy, trade and
technology, also criticized bank
fees—especially those levied on "those who
can least afford it."
In the course of the subcommittee's Thursday
hearing entitled "Remittances: Access,
Transparency, and Market Efficiency—A
Progress Report," Gutierrez said, "Banks these
days are pretty good with fees—and they
always go up."
WOCCU Vice President of Association
Services David Grace testifies on behalf of CUNA and WOCCU during a May
17 congressional hearing on remittances. Photo courtesy of CUNA.
He added that banks recognize a
customer's "economic ability" and level of
financial sophistication and can waive fees if
such charges might inspire a customer to move
his or her funds.
Gutierrez said he wants the same financial
opportunities for all Americans.
Testifying on behalf of World Council of
Unions (WOCCU) and the Credit Union National
Association (CUNA), WOCCU Vice President of
Association Services David Grace explained to
lawmakers what credit unions are doing to drive
down costs and increase delivery opportunities
for foreign-born individuals in the United
States who want to send money to family members
in their home countries.
Grace said WOCCU research has shown, for
instance, that 62% of those receiving
remittances in Guatemala would be living on less
than US$1 a day if it weren't for the funds sent
CUNA and WOCCU offer credit unions a
product called IRnet®
(International Remittance Network), that offers
safe, reliable and affordable wire transfer
services to over 40 countries worldwide.
However, Grace testified, more can be done to
enhance credit union abilities to provide lower
cost remittance services.
He commended a recent statutory change that
enabled credit unions to compete with corner
grocery stores and provide check cashing and
remittance services to non-members within their
fields of membership.
That authority, carried in the Financial
Services Regulatory Improvements Act of 2006,
fosters the kind of competition that will drive
down consumers' cost, according to Grace.
Another avenue to further reduce the cost of
remittances, Grace said, is to ensure that
credit unions and regulated microfinance
institutions abroad can directly access their
national payment systems and card networks.
Grace also told the subcommittee that
needs to restore credit unions' ability to
provide small business loans to new Americans
and to allow for greater service to underserved
Provisions to address both these issues are
included in the Credit Union Regulatory
Improvements Act (CURIA, H.R. 1537). That bill,
which currently boasts 86 co-sponsors, would
ease the current 12.25% restriction on member
business loans by raising the cap to 20%. It
would also clarify the 1998 Credit Union
Membership Access Act to allow all credit
unions, regardless of charter type, to serve
those in underserved areas.
Other witnesses at the hearing were: Tom
vice president government affairs, MoneyGram
International; Beatriz Ibarra, assets policy
analyst, National Council of La Raza; Annette
LoVoi, field director, Appleseed; James C. Orr,
chairman, Microfinance International Corp; and
Mark Thompson, associate general counsel, The
Western Union Company.
Also on Thursday, WOCCU's Grace particpated
monthly "after hours" discussion for staff of
the US Agency for International Development
(USAID), as well as for people who work in the
international development field. A group of
about 50 particpated in the gathering at which
Grace lead a discussion on the link between
remiitances and access to financial services in