Why financial inclusion is the civil rights issue of our time

The head of the independent financial regulatory agency that oversees the United States’ system of federally insured credit unions said during a September 21 World Council of Credit Unions’ webinar — an International Perspective on Financial Inclusion, Social Justice and Credit Union Advocacy that leaders of the sector from across the globe are uniquely positioned to promote and encourage greater financial inclusion for all.

“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 whether they are doing everything they can to reach people with low and moderate incomes; whether they are including disabled and differently abled individuals in their financial inclusion plans and; reflect on people in hard-pressed urban communities, or conversely, distressed rural communities, where financial service options are limited. 

He also said 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, pointing 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 adding that 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,” he said.

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, 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,” he said

World Council of Credit Unions is the global trade association and development platform for credit unions. It 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 and advocates on behalf of the global credit union system before international organizations. and works with national governments to improve legislation and regulation.

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