WASHINGTON (2/28/13)--Sen. Elizabeth Warren (D-Mass.), speaking to the Credit Union National Association's Governmental Affairs Conference here Wednesday, directed the spotlight to shine brightly on the credit union difference.
Across her state of Massachusetts--and all around the country--member-owned credit unions are looking out for people, she said. "That's what credit unions do-they work for their members."
| Dan Egan (left), president of the Massachusetts Credit Union League, and the new Democratic senator from that state, Sen. Elizabeth Warren, greet on the CUNA GAC stage. (CUNA photo)|
Remembering the unfolding of the country's recent financial crisis, the senator said that as one Wall Street banking scandal after another unfolded, credit unions remained a bright spot in the financial industry.
"Credit unions did not break this economy. They did not build business models around tricking their customers. When the economy faltered, they did not turn their backs on the families and small businesses that needed them.
"On the contrary, credit unions worked hard to lead our economic recovery, responsibly and reliably providing credit to their members that need it. The credit union motto says it all: 'not for profit, not for charity, but for service,'" said Warren, who was instrumental in setting up the Consumer Financial Protection Bureau before she won election to become Massachusetts' new senator.
Warren talked about the changes to the financial services market from a generation ago to the time the financial crisis hit. She said that by the time of the crisis some financial services providers no longer provided transparency for consumers on such things as terms for credit cards, checking accounts, mortgages and signature loans.
"While credit unions continued to provide clear, high-quality service for millions of Americans, a different form of pricing had become all too prevalent elsewhere. Too many credit card companies and mortgage lenders used a low advertised price on the front end to entice customers, and then made their real money with fees and charges and penalties and re-pricing on the back end. The costs and risks of products became harder to see, which meant that comparison shopping was almost impossible and the market became less and less efficient."
She said families and small financial institutions alike were hurt.
"Credit unions that wouldn't adopt a business model based on tricks and traps were competing with slick outfits that pretended to underprice them. In other words, the game was rigged--rigged against consumers and rigged against small financial institutions," Warren said.
"When I set up the Consumer Financial Protection Bureau, I wanted to increase transparency in the marketplace and to level the playing field for credit unions and other providers that want to do right by consumers."
Warren criticized GOP opposition to confirming a CFPB director and asked credit unions to encourage lawmakers to approve his appointment.