Matz Suggests Ways Credit Unions Can
“Up the Ante” to Protect their Tax Exemption
and Invest in their Communities
NCUA Board Member Offers Suggestions for the Future at NAFCU Conference on
“Raising the Stakes”
July 15, 2005, Las Vegas, Nev. – At the National Association of Federal Credit Unions’ (NAFCU) Annual Conference in Las Vegas, where the theme was “Raising the Stakes,” NCUA Board Member Debbie Matz emphasized that “the stakes could not be much higher. With high-powered players in Washington calling for credit unions to be taxed, what’s at stake is the very future of credit unions.”
Using Las Vegas parlance, Matz told 2,200 federal credit union officials at the conference, “The cards have been dealt, and now you have two choices: You can either fold your hand and get out of the game, or you can ‘up the ante’ and go ‘all in.’ Since credit union leaders rarely back down from a challenge, I would not expect you to fold. And why would you fold when you are holding a winning hand! With all the regulatory changes we have made at NCUA, if you play your cards right, you can reach greater fields of membership, provide new members with needed services, and make valuable investments in your communities.”
“If you are ready to up the ante and go all in,” Matz continued, “now is the time for you to put all your cards on the table. This means you need to do everything you can to demonstrate that your credit unions are, indeed, earning your tax exemption and investing in your communities.”
“There are many ways to do this,” Matz suggested:
- “First, reach out to everyone in your field of membership. Despite rapidly expanding fields of membership, federal credit unions are increasing actual membership by less than 2% a year. Yet potential members are all around: The population growth of Asians and Latinos is soaring, but these groups are under-represented in credit unions. And while the vast majority of credit union members have aged beyond their prime borrowing years, only 5% of current members are between the ages of 18 and 24. So look at the schools, churches, new businesses, and community centers in your field of membership. Get to know the community leaders, especially those who represent different ethnic groups. Hire bi-lingual staff, and publish your materials in all the languages spoken in your community.”
- “Serve people who don’t have accounts at other insured financial institutions. This is crucial because many lawmakers think credit unions, especially community credit unions, are no different than banks. To convince them that this is not true, help people with low incomes, minorities, recent immigrants, single mothers and younger people who are ripped off every day by predatory lenders. Credit unions can offer the convenience of payday lenders without the outrageous fees and extended terms. It’s such a simple solution! Affordable small loans not only bring in new members, but they put these borrowers on firmer financial footing.”
- “Help more renters buy their first home. You will be doing much more than simply making a loan. Owning a home enables people from all walks of life to put down roots in their communities and realize the American dream. There are literally millions of opportunities for credit unions to build mortgage market share by appealing to people who don’t yet own a home – especially Asians, Latinos, African Americans and young people. Doing so will permit you to reach new members who may have thought the dream of homeownership was, in fact, a mirage – because the closer they got, the farther away it appeared. But you can make this dream a reality. What better way to demonstrate how credit unions earn their tax exemption and reinvest in their communities!”
- “Provide financial education to help borrowers understand credit and budgeting, so they will have no trouble making their monthly payments. Offer this education not only to your current members, but also to your potential members.”
- “Educate your Members of Congress, too. They need to learn that credit unions provide the most affordable financial services to people from all walks of life: people who come from different cultures, speak different languages, and need a place they can trust to help them build new lives for their families; people who are just starting out in the workforce and need help with critical financial decisions that will impact the rest of their lives; people who have fallen on hard times and need alternatives to the predatory lenders which profit from their pain; and people who are striving to achieve what may seem to be impossible dreams – breaking free of predatory lenders, opening a small business, or owning their first home.”
Matz concluded that “people helping people” is the philosophy that sets credit unions apart from banks. “As I look beyond the end of my term, I believe the future of credit unions will be as robust as your past. I believe that as long as you stay true to your timeless philosophy of ‘people helping people,’ credit unions will not only survive, but thrive, and will continue to make dreams come true for millions more people in the years to come.”
Full text of Board Member Matz’s speech is posted at http://www.ncua.gov/news/speeches/speeches_matz.html
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A public service veteran of 25 years, Matz was named as a recess appointee to the NCUA Board in January 2002 and nominated to a seat on the Board on February 27, 2002. The U.S. Senate confirmed her on March 22, 2002. As part of the NCUA Board, Matz oversees the regulation of federal credit unions and the administration of the federal insurance fund covering approximately 9,000 credit unions in the U.S.
Matz is a member of three credit unions and resides in McLean, Va. with her husband and two children. Before her appointment to the NCUA Board, Matz was appointed by President Clinton as Deputy Assistant Secretary for Administration in the Department of Agriculture.
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