Stifling Credit Unions Stifles the American Dream
By Louis Hernandez, Jr.
Credit unions have a long and rich heritage of serving as trusted financial intermediaries for Main Street America. They also have exceptional member satisfaction rates and membership growth. Yet, despite such enviable qualities, America’s policy-makers seem determined to destroy the credit union industry in the United States and, in the process, dismantle the very engines of the American dream.
Ever since the financial crisis, we have witnessed a series of broad-stroke financial regulations with compliance requirements and costs that have severely threatened credit unions’ ability to do what they do best, which is to drive economic growth and stability in local communities, and to support the fundamental tenets of the American Dream–home ownership, getting an education, starting a business and achieving financial security.
It’s a simple equation: 70 percent of the U.S. economy is consumer spending, which is strongly correlated with jobs and employment; 65 percent of new jobs are created by entrepreneurs and small business; and 60 percent of the loans to small businesses come from Main Street banks and credit unions. Main Street institutions also disproportionately provide loans for houses, autos, education and the basic credit that supports the national economy.
But recent polices, which were supposed to de-risk the banking industry, stabilize the economy, create jobs and protect the consumer, have instead undermined all these areas while creating a growing disconnect between the needs of our Wall Street and Main Street financial institutions. Instead of doing more to support our credit unions and rebuild the American Dream, these policies are crippling them.