FOR IMMEDIATE RELEASE
ICBA Urges Congress to Reject Expanded Credit Union Powers
Washington, D.C. (March 21, 2007)—The Independent Community Bankers of America (ICBA) urged Congress to reject new credit union powers to expand into commercial lending and move far beyond their tax-exempt statutory mission to serve people of modest means. The new powers are part of the Credit Union Regulatory Improvements Act of 2007 (H.R. 1537), or "CURIA." ICBA continues to strongly oppose this legislation.
"If the large, multi-group and geographic-based credit unions want to operate like commercial banks, they should be subject to the same rules and regulations as commercial banks, including taxation and the Community Reinvestment Act (CRA)," said Camden Fine, ICBA president and CEO in a letter to Congress. "This unfair legislation is billed as regulatory relief when in reality tax-advantaged credit unions would unfairly receive vastly expanded powers to do commercial lending."
CURIA would permit credit unions to nearly double their commercial lending and weaken safety and soundness practices currently in place. While thousands of traditional credit unions stick to their statutory mission of serving members of low and moderate means, many bank-like credit unions are quickly expanding to cover large geographic areas and into commercial lending without paying taxes, complying with CRA, or demonstrating service to people of modest means. A recent GAO study shows that credit unions now serve a more well-off customer base than commercial banks, calling into question their core tax-exempt mission to serve people of modest means, and the fundamental rationale for their tax-exempt status.
Other studies, including one by the non-partisan Tax Foundation, have reached the same conclusions. The new power grab in H.R. 1537 has nothing to do with the credit unions' tax-exempt mission. It would allow such things as financing restaurants, offices or luxury hotels. ICBA urges all lawmakers to oppose H.R. 1537 since it will allow credit unions to stray further from their tax-exempt mission.
ICBA has long opposed expanded powers for credit unions, particularly the proposal to raise the cap on member business loans, so long as credit unions remain exempt from taxation. ICBA is a strong advocate for tax parity between community banks and credit unions, arguing that a fair and unbiased tax system would apply the same tax treatment to similar industries, economic actions and transactions.
Find additional information at www.icba.org.