Top U.S. Credit Union Regulator Calls Financial Inclusion the “Civil Rights Issue of Our Time”
NCUA Chair Rodney Hood tells WOCCU webinar audience that credit unions are uniquely positioned to meet the challenge
September 22, 2020
MADISON, Wis.—The head of the independent financial regulatory agency that oversees the United States’ system of federally insured credit unions said leaders of the sector from across the globe are uniquely positioned to promote and encourage greater financial inclusion for all during a September 21 World Council of Credit Unions' webinar—An International Perspective on Financial Inclusion, Social Justice and Credit Union Advocacy.
“If we create conditions where people can gain access to credit and capital; break the cycle of debt and dependency; and achieve financial security and resilience for themselves and their families, we’ll have gone a long way toward addressing the inequities that are fueling so many of the social challenges we face. It’s why I believe so strongly that financial inclusion is the civil rights issue of our time,” said National Credit Union Administration (NCUA) Chair Rodney Hood.
Hood said credit union leaders must ask themselves:
- Are we doing everything we can to reach people with low and moderate incomes?
- Are we including disabled and differently abled individuals in our financial inclusion plans?
- What about people in hard-pressed urban communities, or conversely, distressed rural communities, where financial service options are limited?
He also stressed that credit unions must use financial technology and continue to introduce innovative financial products that promote greater financial inclusion.
“We very much appreciate your words and your call to action for the innovation and commitment that credit unions can provide in terms of financial inclusion and providing access to populations that are underserved,” said Brian Branch in thanking Chairman Hood for his presentation.
Branch also pointed out the impact international regulations can have on financial inclusion—and why WOCCU advocates for the fair and proportional treatment of credit unions in front of international standard setting bodies, such as the Basel Committee on Banking Supervision.
“Because sometimes the regulatory burden, the regulatory constraints can prevent community-based institutions from serving that underserved population and introducing some of the innovations to people who traditionally have not had access to the formal financial system,” said Branch.
Hood said NCUA takes a principles-based approach to that dilemma by seeking to deploy international regulations that can help expand financial inclusion—such as providing greater access to payment systems through fintech.
Diversity, equity and inclusion initiatives
Hood also stressed the diversity, equity and inclusion (DEI) efforts credit unions undertake must be more than symbolic.
“If we’re just replacing a bunch of holders of Ivy League degrees on the board of directors with a different group of Ivy League degree holders, it’s hard to see how we’ve made an appreciable difference for society. And we’ve certainly done little to address, in a substantive and concrete way, the inequities that are at the root of the stresses and instability our societies struggle with,” said Hood.
Jim Nussle said—even before the death of George Floyd—CUNA has been working to expand concrete DEI initiatives among its member credit unions in the United States that have a true impact.
“It goes to fairness and freedom and civil rights, but it also goes to the business case of our credit union. We’re better when we have diversity,” said Nussle. “We’re better when members of an underserved community can look into a credit union and see someone that looks like them or speaks their language and walks in the door.”You can watch the webinar in its entirety on the WOCCU YouTube Channel.
World Council of Credit Unions is the global trade association and development platform 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 300+ technical assistance programs in 89 countries. Worldwide, 85,400 credit unions in 118 countries serve 274 million people. Learn more about World Council's impact around the world at www.woccu.org.