Co-op News September 2021

16 | SEPTEMBER 2021
USA
Wave of federal
acts could offer co-op
sector a springboard
Federal lawmakers are working on a raft
of new bills which could boost operations
in the co-op and credit union sectors.
The reforms take in a number of areas
of concern where the co-op movement
is well-placed to take action, from
rural broadband and renewable energy
provision to financial inclusion and
worker resilience.
One step welcomed by the sector is a
bill passed by the US House Committee
on Financial Services, ordering regulators
to examine barriers to the creation of new
credit unions.
The Promoting New and Diverse
Depository Institutions Act is supported
by the Credit Union National Association
(CUNA) and the National Association of
Federally-Insured Credit Unions (NAFCU).
It requires the National Credit Union
Administration and other prudential
regulators to conduct an 18-month study
examining challenges prospective new
depository institutions face. The regulators
would also be tasked with devising a plan
to encourage new financial institutions
while promoting safety and soundness.
“A challenge credit unions face in serving
underserved and unbanked communities
is the high regulatory burden to create
new or de novo credit unions” reads the
letter by CUNA’s CEO, Jim Nussle. “Prior
to the Great Recession, an average of 7.7 de
novo credit unions were created each year.
However, in the years after, and in the wake
of the implementation of Dodd-Frank, that
average decreased to the creation of just 2.2
de novo credit unions per year.”
Innovation partnerships
Meanwhile, a bipartisan bill to create new
regional hubs of innovation across the US
includes co-operatives.
Under the Regional Innovation Act, the
secretary of commerce would be directed
to create and promote regional innovation
hubs via a grant programme. The bill
also seeks to incentivise collaborative
partnerships between local governments,
colleges and universities, private
industry, non-profits, and community
organisations.
During the markup of the bill,
Congressman Jamaal Bowman (D-NY)
proposed an amendment that would
strengthen support for co-ops. The
amendment would allow co-operative
associations, co-operative development
centres, and other organisations to form
consortia and act as innovation hubs. The
hubs would provide, among other things,
co-operative technical assistance, access
to finance, start-ups training and support
for conversions to the co-operative model.
“Building community wealth is a key
goal of this bill and my amendment seeks
to reinforce that goal in a few different
ways,” said Congressman Bowman. “If
we want to democratise our economy and
create new industries in way that brings
everyone in, one of the best ways to do
so is to put employees in the driver seat
by giving them ownership and decisionmaking
stakes in the companies where
they invest their time and talent. My
amendment encourages that model as
well as co-operative business in general.
“In offering this amendment, I am
pleased to find common ground with
my colleagues across the aisle as well as
those who represent rural communities.
From rural electric co-ops to farmer cooperatives,
some of the most exciting
examples of economic democracy come
from rural parts of the country and my
amendment highlights that expertise.”
The amended bill awaits consideration
by the full US House of Representatives.
Infrastructure upgrade
Another bipartisan bill, approved by the
Senate, looks at upgrading the national
infrastructure and could provide billions
of dollars for electric co-op priorities, says
US sector body NCBA CLUSA.
The fund would support development
of broadband, electric vehicle charging
networks and clean energy technology
such as energy storage and carbon capture
and other clean energy technologies.
Electric co-ops have been identified as key
players in rolling out these innovations
into rural parts of the US.
The bill must still be taken up by the
House, which returned early from recess
on 23 August.
“Investing in our energy infrastructure
is vital to ensuring that electric cooperatives
can continue to do what they
do best: provide reliable, affordable power
to 42 million Americans,” said Louis
Finkel, NRECA’s senior vice president of
government relations. “Passage of this bill
is a great start. We’ll continue to work with