In today’s rapidly evolving financial landscape, credit unions face increasing scrutiny regarding fees and consumer protection policies. It appears that everyone is eager to step into the consumer protection arena, proposing broad, sweeping regulations that significantly impact how credit unions and other financial institutions conduct business with their members and customers.
While these regulations are often well-intended, they are frequently suggested and implemented by individuals whose understanding of credit unions is limited to their brief tenure in their current roles. This can be particularly frustrating for those who have dedicated their careers to helping people navigate the complex and ever-growing financial services market.
Credit unions strive to serve all members equitably, pricing their services in a manner that aids those in need without causing harm to the overall membership. Credit unions work diligently to educate members and steer them away from the predatory practices commonly seen in the financial services market. The financial cooperative model is built on the principle of “people helping people,” in stark contrast to for-profit companies whose primary objective is to maximize profits for themselves and their shareholders.
Predatory Lending Providers
These for-profit companies often ensnare customers in costly check cashing, payday loans and title pawn lending cycles. While these businesses operate as designed to maximize profit, nonprofit credit unions get caught up in many regulations that restrict our ability to serve our members, often forcing them to seek alternative, less favorable methods to meet their financial needs.
Overreaching regulations and mandates may make it impossible for credit unions to offer services at rates that allow them to manage the overall subprime market within their institutions. What often gets lost in the conversation is that credit unions do not have to offer these products—they do so because there is a genuine member need and a willingness to help people escape the vicious payday lending cycle. The real concern is not that credit unions will be forced to lower their prices due to regulatory mandates but that they may exit these markets entirely, leaving members with no option other than predatory providers.
Lawmakers and regulators may never fully grasp why credit unions offer these services. It is not a decision made lightly or on a whim but a response to member demand and necessity. The complaints about these fees seem to come predominantly from those in Washington, who lack a true understanding of how credit unions operate beyond their brief job stints.
League Advocates for Tennessee Credit Unions
Rest assured, the Tennessee Credit Union League continues to advocate on behalf of credit unions, striving to mitigate the impact of proposed regulations and allowing credit unions to conduct business and serve their members with the services they demand and need. We are committed to ensuring that credit unions can continue to fulfill their mission of people helping people, providing a vital alternative to the predatory practices that still plague the financial services market.
