Senate Banking Proposal Signals New Opportunities for Credit Unions

Posted by David Mayer

The materials available in this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your own advisors with questions regarding the content herein. The opinions expressed in this article are the opinions of the individual author and may not reflect the opinions of MeridianLink, Inc.

Soon, many Americans will receive coronavirus relief checks from the federal government. But what about those who do not have a bank account, nor any easy way to access these funds? Senator Sherrod Brown of Ohio has proposed a solution. His proposal also points to some unique opportunities for credit unions to embrace digital banking software. Visit this article to learn more about the promise of online account opening software for credit unions, especially during these perilous times.

 

Senate Banking Proposal Signals New Opportunities for Credit Unions

 

The coronavirus pandemic has caused us all to rethink many core aspects of our culture; indeed, the global health crisis has already exposed vulnerabilities in the way we communicate, the way we do business, and the way we bank. By recognizing some of these vulnerabilities, however, we can find surprising opportunities… including some unique opportunities for credit unions.

 

As a case in point, consider a new proposal from Senator Sherrod Brown (D-Ohio). Senator Brown’s initiative would require banking institutions to offer free online accounts to people who don’t already have bank accounts of their own, allowing everyone who received a coronavirus relief check to cash or deposit it.

 

What’s in the Proposal?

 

Specifically, Senator Brown is proposing that individuals receive a digital wallet known as a “FedAccount,” allowing them to quickly, easily, and inexpensively receive the relief funds that Congress will soon be sending out.

 

It’s a good idea. After all, recent legislation has ensured that a majority of American households will receive a check from the government, allowing them to offset some of the economic hardships brought on by COVID-19. With that said, these relief funds are of little use to those who don’t have an easy way to access them.

 

And there are more such people than you might think. According to one estimate, there are more than 8.4 million American adults who do not currently have bank accounts of their own. Senator Brown’s proposal would change that, leveraging digital banking technology to make sure everyone has some kind of banking presence.

 

Specifically, Senator Brown says his legislation would allow every American to set up a free banking account, meaning they wouldn’t have to rely on check cashers, whose services can often be onerously expensive.

 

The proposed FedAccounts would not have minimum balances or account fees of any kind. The Federal Reserve would be tasked with overseeing these accounts.

 

Additionally, those who receive FedAccounts would get debit cards, automatic bill payment, mobile and online banking access, and more.

 

New Opportunities for Credit Unions?

 

Senator Brown’s proposed legislation is an innovative idea that could help a lot of people.

 

It also points to some unique opportunities for credit unions.

 

Again, consider the implications: Millions of Americans are currently without bank accounts. And soon, a lot of those Americans will be receiving checks from the government.

 

There’s never been a better time for credit unions to make their services available to non-members. That’s where digital banking comes in.

 

Online account opening software allows would-be credit union members to sign up for their own account from the comfort of their own home, using a smart phone or tablet. In the age of social distancing, this is a valuable way for credit unions to remain open for business, actually expanding their membership volume even through uncertain times.

 

Additionally, online account opening software for credit unions can help reach those potential members who may be adverse to coming to a physical branch, for whatever reason; think about younger consumers in particular, who are much more prone to do things on their phone when at all possible.

 

Learn More About Online Account Opening Software for Credit Unions

 

We’re in favor of more Americans being able to bank or access credit union services, whether at physical locations or online. And, we encourage credit unions everywhere to seize some of these new opportunities. Start by reaching out to MeridianLink to learn about digital banking tools and online account opening software.

Topics: credit unions, digital banking

Written by David Mayer

Software Training Specialist

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