California Senate Committee Passes Bill Allowing CUs to Serve Low-Income Residents

SACRAMENTO, Calif. – Despite lobbying by the California Bankers Association to defeat the measure, the state Senate Banking Committee approved legislation on May 5 that expands affordable financial services for California’s low-income residents by allowing credit unions to cash checks, wire money, and provide other lifeline services for potential members. SB 1292 was introduced by state Sen. Joe Dunn (D-Garden Grove) on Feb. 17. The measure cleared the Senate committee on an 8-1 vote, and it is now headed to the full Senate floor. Specifically, the bill allows credit unions “to cash checks, sell negotiable instruments including traveler’s checks and money orders, and sell money transfer instruments to any credit union member, depositor, or person within the field of membership.” Commenting on Dunn’s bill, California Credit Union League EVP Matthew Davidson said, “At a time when California’s banks are trying to drive people with low incomes out of their lobbies, credit unions are trying to reach out to the underserved and bring them into the financial mainstream. “A large number of the unbanked are immigrants, many of whom don’t trust institutions. This leaves them vulnerable to alternative providers who charge exorbitant fees and interest rates. As non-profit institutions, credit unions can provide the services this segment of the population most use, like check cashing, at a lower cost. And by offering them gateway services, we can gain their trust and help them to obtain cars, homes, education, retirement savings, and small business funds at affordable rates.” -