ICBA: Credit Union Regulator Again Shows it’s Captive to Tax-Exempt Industry

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Washington, D.C. (Nov. 20, 2015)—Independent Community Bankers of America® (ICBA) President and CEO Camden R. Fine today released the following statement on the National Credit Union Administration’s proposal to drastically expand the powers of tax-exempt credit unions beyond their statutory limits.

“In its latest proposed rule, the National Credit Union Administration has once again shown that it is captive to the credit union industry it is charged with regulating. The NCUA’s plan would weaken numerous legal requirements designed to ensure these tax-subsidized financial firms remain focused on their fundamental mandate of serving people of modest means with a common bond.

“For instance, federal credit unions would be able to apply to serve much larger areas than metropolitan statistical areas or to include areas contiguous to their existing core-based statistical areas. Credit unions also would have a much easier time converting to community charters and expanding into larger geographical areas. In other words, the NCUA proposal would discard any common bond and would allow credit unions to serve just about all air-breathing mammals. Where I come from that should be called a bank, and credit unions are not supposed to be tax-free full commercial banks.

“The NCUA’s sweeping proposed changes to field-of-membership rules is the latest attempt by this regulator and industry advocate to sidestep Congress and extend these tax-exempt institutions’ government-funded competitive advantage over taxpaying community banks. In a public statement, NCUA Board Chairman Debbie Matz indicated that the regulator’s vision is to bring in new customers for these taxpayer-subsidized companies, which is completely out of step with its official mission of promoting safety and soundness through regulation and supervision. Further, NCUA Vice Chairman Rick Metsger said the agency had to act on this proposal because Congress is ‘deadlocked’—clearly demonstrating the agency’s willingness to skirt Congress and rewrite credit union law on its own.

“ICBA strongly opposes the NCUA’s proposal and will actively contest it, as it has the agency’s plans to relax the industry’s business-lending and supplemental capital rules, by any means necessary. Once again, the tax-exempt credit union industry should not be able to continually expand its mandate as long as it remains exempt from taxation and federal financial regulations such as those under the Community Reinvestment Act.”

About ICBA
The Independent Community Bankers of America®, the nation’s voice for more than 6,000 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services.

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