Credit unions are seeking to expand into rural areas through legislation moving in the state House, a move they say would improve access to banking.
Credit unions in North Carolina are currently limited to serving specific groups, like state employees or people who work in a certain profession. would allow them to serve people below the federal poverty line and people who live in an area that's at least eight miles from a bank branch.
Rep. Julia Howard, R-Davie, is sponsoring the bill. She said North Carolina's poorest counties have lost about 40% of the bank branches they had a decade ago.
"Somebody called me late yesterday afternoon and said that he has to drive 62 miles to a bank because so many of the banks have closed," she said. "I'm certainly not criticizing the banks for their business decisions ... it's probably not that profitable to operate in the rural parts of the state, and that's where the credit unions come in."
Citing FDIC data, a news release from the Carolinas Credit Union League says that a cluster of eight counties in eastern North Carolina that had 27 branches in 2013 now has just six total.
"Credit unions have served North Carolinians for more than 100 years, and they鈥檙e seeking permission to extend that service to North Carolinians who have dwindling financial services options in their communities," Credit Union League CEO Dan Schline said.
But Rep. Deb Butler, D-New Hanover, said she's heard opposition from banks, who point out that credit unions would be able to expand while remaining exempt from taxes.
"My concern is that we're giving some credit unions an unfair tax advantage," she said.
The bill would also allow credit unions to offer additional services like safe deposit boxes and electronic fund transfer. They'd also be able to make loans to municipal governments and other credit unions.
The bill passed its first House committee on Tuesday.
Similar legislation passed the House two years ago but didn't make it across the finish line in the Senate. At the time, the N.C. Bankers Association said it would "allow North Carolina credit unions to essentially become banks, just without the tax and regulatory responsibilities borne by banks."
