Letter to the Editor: AB 1177 is misguided

Dear Editor:

Credit unions throughout the state have always served their communities by providing affordable financial products to their members to ensure they do not fall victim to predatory products that exist in the market. The sole purpose of a credit union is to serve our members as not-for-profit, member-owned cooperatives. Credit unions are truly the bank of the people.

That’s why we disagree with California establishing a taxpayer-funded public bank for unbanked and underbanked communities. Credit unions are a reliable alternative that have been around for over 100 years. In California alone, there are nearly 290 credit unions with more than 1,500 branches representing 13 million Californians. Credit unions are specifically chartered to help people of modest means.

This is the reason we are left wondering why there is any need for Assembly Bill 1177, a bill that would create a highly risky, high-cost government banking system that is completely duplicative to what is already being offered by credit unions in the state. If the goal is to access more of the unbanked or underbanked populations, why not use the tool that already exists (credit unions)?

The state could spend a fraction of what AB 1177 would cost to help educate the unbanked population on the benefit of community lenders, such as credit unions.

Teresa Freeborn
President
Kinecta Federal Credit Union