WASHINGTON–One senator said it’s easy to get applause from credit unions, which he got when he pledged his support “all the way to my toes” to protect the tax exemption—but said what he really wants is for credit unions to help tackle another issue that isn’t so easy.
Sen. Ron Wyden (D-OR), ranking member of Senate Committee on Finance, said he wanted to talk to NAFCU’s Congressional Caucus about how CUs can play an even bigger role in fighting inequality in access to financial services.
“The lack of access is starving too many small businesses,” he said. “The fact is everybody suffers when so many people of modest means cannot access credit. In my home state you can count the big businesses on both hands. That’s the nature of how many big guys there are, and all the rest are small. It is key in my view that business ownership, especially small employer firms, must reflect the diversity of our communities. Today, that is not the case. Women in Oregon are 50% of the population, but women-owned businesses make up just 23% of firms. What an incredible waste of talent.”
One Constituent’s Story
Wyden said he recently heard from one woman who is a constituent and who has grown her business 500% in recent years and who “understands the principals of growth” that she has been unable to get a loan because she doesn’t own a house. “She’s considered ‘not bankable,’” he said.
In Oregon, Wyden said African-Americans make up 2% of the population, but African-American owned businesses are .8% of businesses in the state. “This is a shortfall of human potential,” he said.
“When you have this high volume of rejection, you’ve got a population that is more subject to predatory lending and unfair lending practices,” Wyden told credit unions. “You have some of the most talented people in effect having their hands tied in trying to get off the ground.”
Wyden said that in the coming days proposals will be put forward for addressing the issue.
Bigger Role for CUs
“I believe credit unions can play a bigger role in solving these economic challenges. In community after community, credit unions are doing some exceptional work in throwing their doors open,” he said. “I propose looking at ways to expand your role. This would be a win for each of you. Addressing these disparities makes economic sense for credit unions and for everyone else.”
Like one other member of Congress who spoke to Congressional Caucus, Wyden called on more credit unions to participate in NCUA’s voluntary Self-Assessment in order to “provide the genetic material to solve these questions of inequity.”