In addition to serving more low-income and underserved members and customers, credit unions and traditional financial institutions can play an important role in consumer education. Consumers who truly understand the risks and costs inherent in payday loans and predatory home equity loans will be unlikely to patronize these lenders if a fair alternative were available. Most consumers would benefit from basic financial and budgeting information, and traditionally many credit unions have considered consumer education an important part of their mission. I believe that credit unions and other financial institutions can and should expand their education and outreach activities in order to give consumers the information and tools they need to avoid abusive lending practices. In addition to using the regulator s bully pulpit to urge credit unions to become more involved in service and education to low-income Americans, NCUA has also worked to learn more about the problem of predatory lending and how our direct actions might address these problems.
Credit unions are extremely unlikely to engage directly in predatory lending.
Moreover most predatory lenders are not subject to regulation by any of the federal financial regulators. Therefore, options for action are somewhat limited. However, we are working with the other federal financial regulator agencies in an interagency working group to identify areas of common concern. The group includes representatives from the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the Office of the Comptroller of the Currency, the Department of Justice, the Federal Trade Commission, the Department of Housing and Urban Development, the Federal Housing Finance Board, and the Office of Federal Housing Enterprise Oversight. We expect to continue our involvement in this working group to learn more about the issue of predatory lending and to identify steps that can be taken to combat this blight.