Washington Post writer: CUs great for promoting thrift

WASHINGTON (5/13/08)—A personal finance columnist for The Washington Post backed a new idea Sunday to launch a national thrift campaign and noted credit unions should be featured as an important tool to fight consumers' excessive reliance on credit.

Michelle Singletary, who writes "The Color of Money" column for the publication, noted a movement afoot by a coalition of consumer advocates, public policy groups and academics. They want to attack the country's dependence on debt by "creating a national campaign much like the one used to curb smoking."

The organizations mounting the effort include the Institute for American Values, the Institute for Advanced Studies in Culture, the New American Foundation, Public Agenda, the Consumer Federation of American and the National Federation of Community Development Credit Unions.
The coalition is holding a conference in Washington this week and has issued a 68-page report, "For a New Thrift: Confronting the Debt Culture." Eric Richard, general counsel of the Credit Union National Association, is scheduled to address the group today.

The report, Singletary wrote, "merely lists the many ways debt has taken down so many people."

However, credit unions figure prominently among the report's proposals to promote a culture of thrift to replace a reliance on too much debt.

"To combat the culture of credit, the coalition has come up with a number of proposals," Singletary wrote. They include:

• Promote the use of credit unions, which often offer lower-cost financial products. (The report also supports credit union "expansion and innovation.")
• Encourage financial institutions to move into low- to moderate-income neighborhoods and provide low-interest consumer loans. For example, in Appleton, Wis., the Prospera CU has teamed up with Goodwill Industries of North Central Wisconsin to create GoodMoney, where consumers can get short-term loans that are much cheaper than they can get from a payday lender.
• Create a Financial Product Safety Commission modeled after the Consumer Product Safety Commission.