Padilla Introduces Legislation to Expand Financial Services Access in Underserved Communities￼
WASHINGTON, D.C. — Today, U.S. Senator Alex Padilla (D-Calif.) introduced the Expanding Financial Access for Underserved Communities Act, legislation that will allow all federal credit unions to add underserved areas to their membership and ensure these communities are not left without access to financial institutions. The bill would also help drive credit unions to open in underserved communities by exempting business loans made in these areas from the member business lending cap and expanding the definition of an underserved area to include New Markets Tax Credit areas and areas more than ten miles from the nearest financial institution branch.
Research has shown that the number of bank branches in rural and underserved areas has decreased by almost 11% since 2012. During the same time period, the number of credit union branches in those areas has grown by more than 2%. The bill, which was introduced in the House of Representatives by Financial Services Committee Chairwoman Maxine Waters (D-Calif.-43), passed in the House as part of the Financial Services Racial Equity, Inclusion, and Economic Justice Act (H.R. 2543) earlier this summer.
“For far too long, disadvantaged communities have been left behind or have faced barriers in accessing reliable financial services,” said Senator Padilla. “I’m introducing this legislation to ensure that every family and small business has the tools they need to thrive financially because your zip code shouldn’t define the services you can access.”
“As banks close and branches leave town, low-income communities and communities of color have been left with historically and disproportionately limited access to banking services and stripped of the opportunity to build long-term financial health,” said Congresswoman Maxine Waters, Chairwoman of the House Financial Services Committee. “I am pleased Senator Padilla is introducing the Senate companion to my bill to address banking deserts by allowing credit unions to provide financial products and services to these vulnerable communities.”
“The California Congressional delegation continues to speak with their actions to show their depth of support for credit unions,” said Diana R. Dykstra, President and CEO, California and Nevada Credit Union Leagues. “Allowing credit unions to serve banking deserts is vital for our state of over 40 million consumers. I would like to thank Senator Padilla for joining Chairwoman Waters as the leaders of this effort.”
“We thank Sen. Padilla for his leadership in helping credit unions bring safe and affordable financial services to under- and unbanked communities,” said Jim Nussle, President and CEO of the Credit Union National Association. “The House has already passed this bill, and we look to continue to gather support in the Senate for this much-needed update to credit union fields of membership.”
Senator Padilla is fighting to make the American dream a reality for all communities. He believes that a twenty-first-century economy must meet the needs of working families, including by raising the federal minimum wage to $15 an hour, making permanent the recent historic increases in the Child Tax Credit, and ensuring that we develop our workforce. Padilla is focused on elements of equity in our economic system and has cosponsored the LGBTQ Business Equal Credit Enforcement and Investment Act to help enforce fair lending requirements and further protect the approximately 1.4 million LGBTQ-owned businesses across the nation from this type of lending discrimination. He also urged the IRS to ensure that utility assistance provided through the American Rescue Plan Coronavirus State and Local Fiscal Recovery Funds is not subject to federal income taxation.