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Ahead of today's House Financial Services Task Force on Financial Technology hearing to consider the creation of a new FedAccounts system to reach unbanked consumers, NAFCU Vice President of Legislative Affairs Brad Thaler encouraged Congress to instead allow all credit unions to add underserved areas to their fields of membership.

"…[W]e are concerned that the proposal before the Task Force to create a new 'FedAccounts' system in order for consumers to deposit stimulus payments may not realistically happen soon enough to help Americans during this crisis. It could also create major disruptions in the U.S. banking system that have not been fully vetted," Thaler wrote, adding that "NAFCU is open to continuing to work with Treasury and other financial agencies to advance the end goals of financial inclusion and better delivery of [economic impact payments (EIPs)], but tasking the Federal Reserve with developing a wholly new retail banking operation would divert resources away from other important initiatives and overlook opportunities to improve the ability of credit unions to reach underserved or underbanked communities."

Thaler shared how NAFCU is working with the Treasury Department to identify solutions and suggested resources might be better used to make improvements to current systems, such as electronic payment rails and direct deposit, and finalize the Federal Reserve's FedNow system.

Thaler highlighted credit unions' commitment to providing financial services to Americans in unbanked, underbanked, or underserved communities, as well as their efforts to protect members' financial health amid the coronavirus pandemic. Amending the Federal Credit Union Act to allow all credit unions to add these communities to their fields of membership "will allow more Americans to access these vital programs, including a safe place to deposit stimulus payments, all at no cost to the federal government," Thaler argued.

NAFCU previously raised concerns about the FedAccounts proposal in a letter to House Financial Services Committee Chairwoman Maxine Waters, D-Calif.

NAFCU has long advocated for this change and continues to do so as Congress considers additional coronavirus relief packages. NCUA Chairman Rodney Hood and Board Member Todd Harper have also called on Congress to grant the NCUA this authority to ensure all Americans can recover effectively from the economic toll of the coronavirus pandemic.