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WOCCU to G-20 CUs need access to economic infrastructure
MADISON, Wis. (8/31/10)--Financial inclusion initiatives by the Group of 20 (G-20) nations would strongly benefit from the involvement of credit unions, especially in terms of their outreach capabilities to the poor, World Council of Credit Unions (WOCCU) told the G-20’s Access Through Integration Sub-Group (ATISG) in a recent letter. However, appropriate political pressure must be applied to make various countries’ financial infrastructures available to prudentially supervised financial cooperatives for credit unions to effectively serve the global poor, WOCCU said. WOCCU sent its comments to ATISG committee co-chairs Paul Flanagan, general manager of international finance for the Australian Treasury, and Rodrigo Pereira Porto of the Central Bank of Brazil. The letter, a follow-up to WOCCU’s participation in ATISG’s July 13 meeting in Rio de Janeiro, reaffirmed credit unions’ role in helping the G-20 accomplish its financial inclusion goals. “Although WOCCU is supportive of the ATISG’s Principles for Innovative Financial Inclusion, we believe there are multiple areas in which the G-20’s efforts could complement the work of credit unions in the private sector,” said Dave Grace, WOCCU vice president of association services. WOCCU identified areas in which credit unions could assist in the G-20’s financial inclusion efforts:
* Credit unions could be more effective in serving marginalized and remote consumers if they were given greater access to countries’ financial infrastructures. Although credit unions already work under prudential oversight and can accept savings deposits, they often are excluded from direct access to deposit insurance, securitization markets, payment and settlement systems, card networks, credit bureaus and central bank liquidity resources. WOCCU recommended that the G-20 encourage standards-setting bodies worldwide to allow non bank financial institutions access to these critical components of the financial infrastructure. * Innovative credit unions, especially in Mexico and Brazil, have reached the rural poor through technological alternatives that take credit union services to members’ doors or use multiple delivery channels to assure access to services. Providing credit unions access to sufficient resources will further increase access to services and promote the G-20’s financial inclusion goals, WOCCU said.
WOCCU’s letter also described the global trade association’s efforts to build credit union supervisory capacity through its support of the International Credit Union Regulators Network (ICURN), a four-year-old organization of international regulators from 19 agencies with statutory responsibility for the countries they represent. ICURN held its most recent meeting at The 1 Credit Union Conference in Las Vegas in July, attracting 30 representatives from six continents. The letter also mentioned the United Nations’ designation of 2012 as the International Year of Cooperatives as a potential platform for providing additional stimulus for credit unions’ inclusion by the G-20 in support of its economic goals. “We believe the G-20’s financial inclusion efforts can best complement the private sector efforts of credit unions by keeping up the political pressure to open up the financial infrastructure to prudentially supervised and pro-poor institutions,” Grace wrote.
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