Credit unions were one of the last mainstays of small town America – as American as apple pie, thanks to their extremely popular personal relationships with customers and deep investment in local communities. So of course that means liberals want to undermine them through today’s harmful Environmental, Social, Governance (ESG) fad.
ESG rules seek to undermine free-market capitalism by imposing liberal-leaning social goals that ultimately backfire and hurt the very people they intend to help. (RELATED: SHEFFIELD: The people who botched inflation now want you to believe they can avoid recession. Fat Chance!)
I bought my house with a credit union. I have spoken at credit union gatherings across the country. I greatly admire the work of credit unions to serve as building blocks in their communities, especially to help underserved populations who might otherwise be shut out of the financial services industry by large, traditional corporate banks.
For instance, the Credit Union Times reported that “credit unions serve more African Americans: 17% for credit unions, compared to 12.8% for banks and 13.4% for the American population”.
Samira Salem, senior policy analyst at the Credit Union National Association (CUNA) conducted a study showing, as the CU Times reports“Community-chartered credit unions located a higher percentage of their branches in low-income areas, as well as middle- and moderate-income areas, while banks tended to place a higher percentage of their branches in high-income areas.
Given this record, it is odd that the House has just passed the “Racial Equity, Inclusion and Economic Justice in Financial Services Act“, a bill that passes the Senate. It aims to bring the woke ESG to a credit union near you.
Brad Thaler, vice president of legislative affairs at the National Association of Federal Credit Unions, sent a letter to House Speaker Nancy Pelosi expressing concern that this bill increases the data reporting burden and disclosure requirements for credit unions.
“While well-meaning, we must caution against the burden they place on community financial institutions,” Thaler said. “We believe these provisions may prove counterproductive to the goal of increasing access to capital, as institutions spend resources to comply, rather than use them to support members.”
The acronym “CAMELS” that Thaler quotes later in his letter stands for “Capital Adequacy, Asset Quality, Management, Earnings, Liquidity and Sensitivity”.
Thaler said his group is also wary of Title IV, Subtitle B language that would tie diversity and inclusion rankings to safety and soundness reviews and CAMELS scores. While we think looking at diversity and inclusion is important and should be looked at, we don’t think linking diversity and inclusion ratings to safety and soundness and scores CAMELS is the right approach to solve this problem.
Translation: House Democrats want to do credit unions what credit rating agencies like S&P make municipal bond issuers. State and federal officials in Utah sent a fiery letter to S&P refusing to comply with ESG disclosure requirements. Utah leaders have said this use of left-leaning measures could very well be illegal because it puts partisanship ahead of fiduciary rules.
Now that this credit union bill is pending in the Senate, the question is whether enough sensible senators will protect credit unions from this.
Carrie Sheffield is a Senior Policy Analyst at Voice of Independent Women.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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