Community Bankers’ Message to Congress: Rein in Credit Unions
Community Bankers’ Message to Congress: Rein in Credit Unions
Community bankers are visiting members of Congress this week
Hundreds of community bankers arrived in the nation’s capital this week to deliver a familiar message to Congress: rein in those out-of-control credit unions.
The Independent Community Bankers of Americas’ “Capital Summit,” the community bankers’ equivalent of America’s Credit Unions’ “Governmental Affairs Conference,” is being held this week. Just like the “Hike the Hill” efforts by the credit union trade group, bankers are being shuttled to Capitol Hill to meet with lawmakers and their staffs.
As part of the summit, the ICBA outlined its lobbying objectives. Many of the objectives are similar to those favored by credit union trade groups, including stopping regulatory overreach, opposing credit card routing mandates and enacting marijuana banking legislation.
After those issues, the similarities end. The ICBA is focused on eliminating what it believes are the unfair advantages of credit unions.
The ICBA said that the trade group is “particularly alarmed” by the recent trend of credit unions purchasing banks. Credit unions are “effectively ‘weaponizing’ their tax subsidy and lax regulatory standards” to purchase banks, ICBA charged.
The community bankers also have adopted a 2024 credit union resolution that sounds a familiar theme regarding taxes. “ICBA urges Congress to end the unwarranted federal tax subsidy of the credit union industry and/or promote increased tax parity between credit unions and community banks,” the trade group said.
Specifically, the ICBA:
Opposes “credit unions’ exploitation of their tax subsidy and lax regulatory environment to acquire locally based community banks.”
Urges Congress to investigate the National Credit Union Administration’s failure to supervise the industry.
Opposes expanded powers for Credit Union Service Organizations. The trade group also supports providing the NCUA with supervisory powers over credit union third-party vendors. (Americas Credit Unions opposes giving the agency third-party vendor authority, but NCUA officials contend it is needed, calling the lack of supervisory power a “regulatory blind spot.”)
Opposes the “weakening” of safeguards on commercial lending, field of membership and subordinated debt.
Supports applying the Community Reinvestment Act to credit unions.
Wants credit unions to be subject to fair lending exams with the same frequency as banks. The trade group said that while the Federal Deposit Insurance Corp. reviews thousands of banks for compliance with those laws, the NCUA conducts about 50 such exams each year. (NCUA Chairman Todd Harper has said he wants to increase the number of fair lending exams at credit unions.)
Urges states to prohibit the placement of public deposits in credit unions.
Wants federal credit unions to have to submit form 990 tax filings, as do other tax-exempt organizations.
Clearly, this week Congress is going to hear a lot about the “evils” of credit unions.