The international credit union movement urges the G20 to take action to increase financial inclusion through a focus on the importance of proportionality, CUNA and the World Council of Credit Unions wrote to Treasury Secretary Janet Yellen Friday in advance of the release the 2021 G20 Rome Leaders’ Declaration.
CUNA and the World Council request language be included in the declaration noting that it is imperative for national-level regulators to work in connection with the international standard setting bodies to fully adopt proportional tailoring of regulations.
“The link between proportionality and financial inclusion has been well studied and documented as it allows the expansion of a financial institutions’ ability to serve people outside the financial system,” the letter reads. “Proportionality allows national-level regulators to tailor those rules that are often designed for large, internationally active banks in such a manner that will allow a local, community based financial institution to operate. This in turn allows institutions such as credit unions to serve those underserved markets.”
CUNA and World Council fully support the G20’s commitment to financial inclusion and their mission to support credit unions globally is directly aligned with the G20’s objective to reduce inequalities and promote inclusive growth, the organizations note.
The specific language CUNA and the World Council seek to include in the declaration is:
The G20 is committed to continuing its efforts to reduce inequalities and promote inclusive growth. Financial inclusion reduces inequality, which in turn supports inclusive and sustainable growth by allowing the vulnerable to remain healthy, stay out of poverty, pay for education and accumulate human capital.
The proportionate application of International Standards for financial regulation is a critical factor in enabling innovative financial inclusion. Financial inclusion provides for more stable markets by bringing more depositors and deposit accounts into the financial system.
To this end we direct the Financial Stability Board (FSB) and standard setting bodies to coordinate efforts to further develop the ecosystem such that the requisite capacity to implement proportionality in practice is enhanced.
We direct the FSB and standard setting bodies to report progress on the implementation of proportionality for financial regulation annually to the G20.