CU Testimony Calls For Passage Of Anti-Predator Bill
Although Congress was in recess last week, the House Subcommittee on Rural Enterprise, Agriculture and Technology held a special hearing here with Arkansas FCU CEO Hank Klein testifying that credit unions find "predatory lending in any form unacceptable."
Klein, testifying on behalf of NAFCU, told lawmakers that the "credit union community disapproves of any practices that take advantage of uninformed and unwary consumers by subjecting them to deception, misleading and incomplete information, falsifications, or outright fraud."
The CEO of the $397-million CU said NAFCU supports "meaningful efforts to eliminate predatory lending practices in all sectors of the economy" and therefore supports the the Expanded Access to Financial Services Act (HR 749), which was introduced by U.S. Rep. Jim Gerlach (R-PA).
The bill would allow credit unions to provide check cashing, money orders and wire transfer services to anyone eligible to join the credit union instead of only to those who have actually become members.
Klein's testimony focused on how predatory lenders target members of the military and how credit unions have sought to combat this threat. Arkansas FCU released a study last year that looked at predatory lenders that were operating in the same cities and towns as the CU. Among the conclusions of that study:
* Many predatory lenders were unlicensed and unregulated by either state or federal authorities.
* In some cities, there were more predatory lenders than there were McDonald's restaurants.
* The lower the median income level of the city, the higher the number of predatory lenders in the city, "reaffirming what many studies have found-payday lenders prey on the military and lower-income consumers who can least afford the service."
Klein told the subcommittee that credit unions "are leading the fight against predatory lenders" and cited efforts by Navy FCU, Pentagon FCU and other defense credit unions, as well as efforts by his own CU to stamp out predatory lending by providing members with financial literacy education as well as offering lower-priced products and services to compete with predatory lenders.
Klein also pointed to the Credit Union Regulatory Improvement Act as important legislation that would allow credit unions to help more people avoid predatory lenders.