FOR IMMEDIATE RELEASE
Thousands Now Oppose Credit Union Power Grab
More than 12,500 constituents sign petition to stop further credit union mission creep
Washington, D.C. (March 22, 2012)— The Independent Community Bankers of America (ICBA) today unveiled a new petition with more than 12,500 constituent signatures opposing the tax-exempt credit unions’ excessive power grab to expand further into prohibited business lending.
“ICBA and more than 12,500 constituents vigorously oppose legislation to expand commercial lending powers of tax-exempt credit unions,” said Camden R. Fine, ICBA president and CEO. “Expanding the business-lending authority to benefit tax-exempt credit unions—at the expense of taxpaying community banks—would widen budget deficits at the federal, state and local levels. This would be grossly counterproductive during a time when our country faces a massive deficit.”
Fine went on to say that the credit unions’ constant push to act like banks brings up a critical issue: Credit unions have a very generous tax subsidy and lighter regulations because they are supposed to serve people of modest means, which is the reason Congress imposed a cap on their commercial lending authority. Any credit union expansion into prohibited commercial lending must be accompanied by taxation and compliance with Communities Reinvestment Act (CRA) requirements. “If credit unions want to have expanded business lending powers and compete with taxpaying banks, we need balance in taxing and in applying CRA on credit unions,” Fine said.
Notably, the push to expand credit union powers is unwarranted and the work of only a tiny handful of massive, bank-like credit unions. According to the National Credit Union Administration, of the nation’s 7,300 credit unions, fewer than 200 are at or near the current member business lending cap. Furthermore, Small Business Administration loans, as well as any small business loans of $50,000 or less, are exempt from the cap. This means there is ample capacity already for the 98 percent of credit unions below the federally mandated cap to expand their lending with no change to current law if they choose to do so.
“If it quacks like a duck and walks like a duck, it’s a duck; and credit unions are no different,” Fine said. “Today’s multi-billion dollar credit unions walk, talk – and lend and invest – a lot like banks. It’s time for them to observe the same laws that banks do.”