WASHINGTON, D.C. - In order to prosper, consumers in emerging Latin American nations require comprehensive financial services available through financial cooperatives with direct access to payment systems, World Council of Credit Unions (WOCCU) representatives told participants in a two-day conference on consumer finances earlier this month. The best way to maximize access is through cooperatives that are untaxed, enabling them to more affordably serve members, according to WOCCU.
The conference, "Financial Inclusion in the Americas," brought together industry officials from the United States, Mexico, Guatemala, Honduras and El Salvador to discuss methodologies by which the involved countries can create more inclusive and broadly available financial services access for its citizens, according to Dave Grace, WOCCU's vice president of association services. The event's 80 participants, convened by U.S. Treasurer Anna Escobedo Cabral, included representatives from various Latin American financial systems, executives from World Bank and other organizations.
"In our experience, credit union systems grow and provide greater outreach when they are able to offer necessary products and services," said Grace, who represented WOCCU at the conference. "The credit unions in the participating countries require unfettered access to payment systems, credit bureaus and card service providers and networks in order to do that."
In their pursuit of greater payment systems access, credit unions in the represented Latin American countries are engaged in a struggle similar to the share draft battle U.S. credit unions fought in the 1970s. For this fight, the U.S. Treasury Dept. has come out strongly in favor of increased credit union access, said Grace, who also spoke out against credit union taxation, citing its potential detrimental effects to evolving systems.
"Of the countries represented, only Guatemala requires credit unions to pay income tax," said Grace. "Taxation can be a threat to credit union survival, and ensuring tax exemption is a clear and demonstrable way for governments to encourage access to financial services."
Following the workshop, the U.S. Treasury Dept. has committed to provide technical assistance to the four participating countries to help broaden financial services access. WOCCU will work with the federal agency as appropriate to assure that credit unions remain viable alternatives to serving various populations, Grace said.