ACCESS ACROSS AMERICA
COLONIAS INITIATIVE WORKSHOP

Remarks by

Dennis Dollar
NCUA Chairman

Embassy Suites Hotel
El Paso, Texas

Wednesday, September 4, 2002

Anthony, thank you for the kind introduction and to you and your team in the Office of Credit Union Development for all of your hard work in developing this workshop for credit unions.  You have put together an outstanding and what I believe will be a very informative agenda.  Thank you. 

It is a honor to be with you today and on behalf of National Credit Union Administration Board, we thank you all for your interest and continued commitment to providing access – access to affordable financial services in the Colonias, in your communities, and across America.

We are especially honored today to have as our special guest speaker – Rosario Marin, the United States Treasurer, who is a key member of the President’s economic team as the Treasurer of the United States of America. Treasurer Marin also champions the President’s financial literacy initiatives and she is also quite important to all of us, as Treasurer, the money in your pocket may have her signature. 

Gilbert Gonzalez, a good San Antonio native who is now the Deputy Under Secretary for the US Department of Agriculture, is also with us today. You will hear from Gil this afternoon and I know will receive much benefit from his remarks.  Harold Feeney, Texas State Credit Union Commissioner, Dick Ensweiler, President and CEO of the Texas Credit Union League, and another valued member of the credit union community here in El Paso, Harriet May, CEO of Government Employees Credit Union and Past Chair of the Texas Credit Union League – thank you for being here today and for your support and wise counsel in organizing this workshop and for your ongoing and impressive efforts in serving the Colonias.

Jane Walters, our NCUA regional director in our Austin office, thank you for being here, and we appreciate the good work and dedication of your regional staff.  This region has been a real leader in making our Access Across America initiative a success.

It is great to be back in Texas, to be in El Paso – of course, it is always nice to leave the Washington beltway and meet with America’s credit union volunteers, managers, and leaders who are truly committed to the heartbeat of service.  I am especially pleased to be here today because many of the answers to the huge need for access to financial empowerment for the Colonias will be found right here in Texas – where folks from all walks and stations of life have proven they can overcome barriers of all types to achieve the American Dream, but you have learned that often – if not always - before they can move further down the road toward that American Dream, they need a partner to help them onto the “On Ramp” of opportunity.

Realizing the role that credit unions can play in being that partner and providing that opportunity, as NCUA Chairman I intend to continue to encourage the NCUA Board, where the federal statutes allow, to enable credit unions to extend their services in more innovative ways to more members in my belief that this will result in more folks from all walks of life having access to lower-cost financial services and more long term viability of credit unions as safe and sound not-for-profit financial cooperatives filling your niche in a marketplace that needs, yes, needs the not-for-profit sector to be viable and growing.  I believe that this NCUA Board is not only up to that challenge, but is looking forward to it.

Both of my colleagues on the NCUA Board, Deborah Matz and JoAnn Johnson, who you will hear from later in this workshop, are totally committed to helping to facilitate where appropriate the extension of credit union services to more folks who need it.  Although our first priority is and must remain the safety and soundness of America’s credit unions, we likewise consider it a priority to create a regulatory environment which facilitates and, yes, empowers credit unions to extend their lower-cost service options to more folks and to positively impact more communities.

We know there are numerous issues facing the Colonias, such as housing, quality water and sewer service, health care, and unemployment concerns. It is virtually impossible for anyone to achieve the American dream of financial independence if his or her primary financial institution is a pawn shop, title loan company or check cashing outlet or if his or her greatest equity interest is in a contract for deed.

Financial self-sufficiency is often demonstrated by such recognized indicators as a savings account available to help meet future needs such as college for the kids, medical costs or retirement; ability to access entrepreneurial capital for a small start-up business if needed; ready access to personal credit for a vehicle, appliances or other high-dollar necessities; and home ownership.  By these measures, financial independence for America’s over 90 million ‘unbanked’ or ‘underserved’ individuals is indeed an elusive goal which they might never meet without a partner.  Credit unions can be that partner for many of these Americans in their goal for personal empowerment through financial self-sufficiency.

Believing that credit unions can be a part of the solution to this growing need in our country, NCUA has developed an initiative we call ‘Access Across America’ which is designed to facilitate the extension of low-cost credit union services to millions of these citizens.  As President Bush has said very clearly, the measurement of true compassion is results and the measure of compassion is more than good intentions, it is good results. The initiative is already showing tremendous results with a growing interest being expressed daily by credit unions, the neighborhoods which need their services and others who are watching what credit unions are accomplishing through this initiative.

Why does Access Across America matter?  The three A’s in the initiative’s name tell the story.

Access speaks to the purpose of the initiative and the proper role of NCUA as a governmental agency.  Government has never signed up the first credit union member, nor has it made the first credit union loan.  Vital though our role is as a safety and soundness regulator, NCUA must recognize the limits of what we can and cannot do.

Credit unions serve their members.  NCUA cannot do that.  However, as a governmental agency, we can be and should be an agent of access and opportunity to that service.   

In fact, as long as the service is provided in accordance with applicable law and regulation and is extended in a safe and sound manner, NCUA should facilitate credit unions as they seek to reach out and provide lower-cost financial services to as many Americans as possible.

Today over 90 million Americans reside in census tracts designated by the US Treasury Department’s Community Development Financial Institutions (CDFI) program as underserved.  These are folks who have largely been abandoned by traditional financial institutions during the merger-mania years and have been left to the mercy of the check cashers and pawn shops which proliferate in their neighborhoods.

Although NCUA as a government agency cannot guarantee that they will choose to join a credit union or take advantage of a credit union’s services if offered, we can make it easier for visionary, well-managed credit unions to adopt those underserved neighborhoods into their fields of membership and to extend many of the needed services to those who live there.

Make no mistake about it.  Even though I am a strong proponent of government remaining in its proper role and limiting its arm from over reaching into many areas where excessive regulation creates more problems than it solves, I do believe that government has some clear responsibilities which it should do and do them well.  Ensuring safety and soundness with a regulatory process which has integrity and is effective without being excessive is one of those responsibilities.  Being an agent of access and opportunity for those who desire a better life is another from which we must not waiver.  Access Across America is an initiative founded in both of these responsibilities.

Through a streamlined process and the prioritization of applications by those credit unions who submit a workable business plan to serve one or more of these underserved areas, NCUA was able to be an agent of opportunity for over 16.1 million Americans who became eligible to join a credit union under our Access Across America initiative in 2001.

Over 9.1 million additional Americans living in CDFI underserved areas have been made eligible to join a credit union during the first six months of this year.  Over 200 federal credit unions have stepped forward to adopt these neighborhoods in the last 18 months and, although such an expansion of services is not the right fit for every credit union and must be carefully evaluated as a part of a safe and sound business plan, it is an opportunity for many credit unions to consider.  This is a partnership – and the success depends, not just on NCUA, but also on America’s credit unions.

We encourage credit unions under Access Across America to think outside their present comfort zones and to see the opportunities available in many of these underserved areas.  As they examine the possibilities of extending service to these neighborhoods as a part of their outreach-oriented business plans, NCUA is turning an approval process which once took over a year into one which can be completed in less than two months.

Without sacrificing standards but by prioritizing streamlined process, NCUA has removed the biggest single deterrent to credit unions reaching out to adopt these underserved areas - regulatory hurdles.

As mentioned above, the results in 2001 are staggering when compared with just two years ago in 1999 when only 7 credit unions adopted underserved areas with only 350,000 residents. 

The difference is an emphasis on access – which is what the Credit Union Membership Access Act was all about and which Access Across America is built upon.

Across speaks to the nationwide dimensions of this initiative.  Just as those 90 million Americans are scattered across this great land of ours, so are the credit unions that can provide them with an alternative to a payday lender’s 400% loan or a rent-to-own company’s 200% furniture financing plan.

In 2001, 165 credit unions adopted a record 282 underserved areas.  Applications on a pace to far exceed that record number continue to be received so far in 2002.  These underserved areas are located all across the country with applications having been approved in 41 states since the initiative began.  All six of NCUA’s regional offices have made Access Across America a high priority and it will remain so.

When combined with last year’s approval of 135 community charter conversions or expansions (each of which also contained a number of CDFI underserved areas in the approved communities), America’s credit unions have demonstrated that they are willing to put their money where their mouth is by taking advantage of the legal and regulatory opportunities available to them to serve “unbanked” neighborhoods.

Because they are required by NCUA regulation to have a physical presence in any underserved area they choose to serve, credit unions demonstrate through their investment in the community that they are willing to be a lower-cost alternative to the high-cost lenders which have been often accused (and rightly so) of being predatory in their lending practices, rates and terms in many of those same communities.

Even though they are often criticized for reaching out to serve the very communities their critics have abandoned, NCUA believes credit unions who desire to allow their heartbeat for serving the unbanked to manifest itself through service to these neighborhoods should be facilitated so long as they have a safe and sound plan for doing so. 

America needs access to the lower-cost services credit unions can provide.  It is then their choice as a consumer as to whether to take advantage of those services.  History tells us that they will do so when the opportunity is there.  Credit unions have over 80 million members nationwide today.

As Treasurer Marin will discuss, financial literacy is a key element in helping meet the needs of the “unbanked” in America.  Credit unions are increasing their financial counseling programs in these communities, helping folks recognize that a 400% payday loan is not a good deal no matter how badly they need the money today.

Working in partnership with other governmental agencies as a part of the Bush Administration’s focus on creating empowerment opportunities for individuals who may lack financial self-sufficiency today, NCUA is encouraging credit unions to participate in programs offered by the Treasury Department, HUD, Department of Agriculture, Small Business Administration, and others to help them further financial literacy efforts and extend credit and savings opportunities for first-time members – many of whom are opening their first-ever account. 

Today, we will sign a Memorandum of Understanding with the Department of Agriculture and the Internal Revenue Service as part of our partnership initiatives for the sharing of information and resources, in an effort to provide credit unions with greater resources in the pursuit to provide access to the millions of Americans who lack access to affordable financial services.

One of the most-overlooked aspects of NCUA’s Access Across America initiative is the partnership opportunities it encourages with these other governmental programs.  It is our hope that this three-day workshop will introduce you to many partnership opportunities with other public and private partnership initiatives.  Although credit unions are indeed stepping forward through this initiative to help achieve Access Across America without a regulatory or statutory mandate requiring them to do so, we should all recognize that this must be an ongoing effort.  Not only should credit unions consider whether their business planning would benefit by outreach into an underserved neighborhood as an addition to their present field of membership, but all credit unions should keep good records to demonstrate their successes in this arena.

Serving people from all walks of life is an important part of the credit union heartbeat and the success stories are legion.  Those stories must be documented and shared by the credit unions that have seen the life-changing victories they have empowered through their outreach efforts.

And we at NCUA must continue to be the agent of opportunity and access which makes those success stories possible.

That is why Access Across America matters.    

We will never be fully successful in furthering access across America if we do not continue to make our field of membership rules and process more open where it is allowable under the law and more user-friendly when both credit unions, employer groups, associations, communities, faith-based organizations and, most importantly, members try to take advantage of its purpose to extend lower-cost financial services to more Americans. We want to facilitate greater credit union access in every way that the law allows when it is built upon the solid foundation of safety and soundness. 

Access Across America requires a commitment to all three words…access – across – America.  It requires a commitment of both the regulator and the regulated for broad-based access to lower-cost financial services for all in America who need it and seek it.  NCUA is working to put that commitment into practice.   

I encourage you to share that commitment, demonstrate that commitment, document where possible your successes as you daily meet that commitment and extend that commitment to more who need it with vision, innovation, a safe and sound business plan and diligent management.

As you do, you will make an even more indelible mark on America than the significant one you have already made. 

Thank you very much.

Dennis Dollar was appointed Chairman of the National Credit Union Administration (NCUA) by President Bush in 2001.  A former two-term member of the Mississippi House of Representatives, Chairman Dollar served as President and CEO of the Gulfport VA Federal Credit Union in Gulfport, Mississippi, prior to his confirmation to the NCUA Board in 1997. 

Remarks by United States Treasurer Rosario Marin at NCUA's Access Across Amercia workshop in El Paso, Texas - September 4, 2002