Raleigh, NC (February 26, 2025) |
House leaders introduced a bill on Monday to address dwindling financial services options available to North Carolinians, especially in rural areas.
Since 2013, banks have closed nearly 40% of branches in Tier 1 counties, which the NC Department of Commerce classifies as the 40 most economically distressed counties in the state. More than 640 bank branches have closed statewide. For example, FDIC data shows that eight counties, all of them in eastern North Carolina, now have a total of six bank branches between them. In 2013, they were home to 27 branches.
First sponsored by state Reps. Julia Howard (R-Davie), John Bell (R-Wayne), Jennifer Balkcom (R-Henderson), and Ya Liu (D-Wake), the bill continues to garner bipartisan sponsorship support from House members.
Rep. Julia Howard said, “This is straightforward for me. We have bank branches that are leaving rural North Carolina, and we have credit unions that want to better serve those communities but need government permission to do so. This bill grants credit unions that permission.”
According to the Federal Reserve, “Lack of access to banking services can mean losing opportunities to improve financial health and build wealth... Declining access to traditional banking services might also drive consumers to alternative financial services like payday lenders and check-cashing services that can raise the overall cost of banking and inhibit opportunities for saving.”
Credit unions and banks offer similar services like loans, checking and savings accounts, and credit cards. But unlike banks, credit unions are not-for-profit cooperatives. Every depositor is an equal part-owner of the credit union. Instead of maximizing profit for shareholders, credit unions – as cooperatives – are legally structured simply to serve their member-owners.
Because of that model, credit unions are in a better position to step in and serve communities that are seeing bank branches leave.
Typically, to join a credit union a person must be part of some defined group, often working for the same employer or part of an association. House Bill 187 would give credit unions permission to also serve residents of a banking desert, which are areas of the state with no bank branches nearby. A similar measure passed the House last session by an 85-25 margin.
Dan Schline, president and CEO of the Carolinas Credit Union League, said, “Thank you to Reps. Howard, Bell, Balkcom, and Liu. Credit unions have served North Carolinians for more than 100 years, and they’re seeking permission to extend that service to North Carolinians who have dwindling financial services options in their communities.”
The bill would also modernize the statutes governing credit unions, which haven’t been updated since the 1970s.