Credit unions are ‘proven, market-based model for affordability’
Policymakers’ quest to deliver affordability to American consumers will involve identifying efforts that are already working, and that’s where credit unions come in. Writing in RealClearPolicy Thursday, America’s Credit Unions President/CEO Scott Simpson said credit unions have a strong legacy of fighting against rising costs.
“For decades, credit unions have quietly done what policymakers across administrations have struggled to engineer: provide affordable credit at scale, without gimmicks and without distorting markets,” he wrote. “They are member-owned, not-for-profit financial cooperatives, designed explicitly to put consumers first – a lot of consumers. Credit unions serve 145 million Americans.”
Credit unions price for “service and sustainability,” unlike for-profit institutions, Simpson notes, and continue to represent a “proven, market-based model for affordability.”
This was the case when inflation surged, and interest rates climbed, when many credit unions absorbed the pressure and kept extending credit, especially to working families, military members, and consumers lower on the credit spectrum.
Proposals like interest rate caps and other broad, once-size-fits-all interventions often achieve the opposite result for those policymakers are seeking to help.
“There is another path. Rather than attempting to manufacture affordability through mandates, policymakers could expand and strengthen access to the institutions already delivering it. Credit unions already cap rates, already return value to consumers, and already operate without taxpayer risk,” Simpson wrote. “The question isn’t whether affordable credit is possible, it’s how quickly we can help more Americans access it.”