FOR IMMEDIATE RELEASE
ICBA Statement on Credit Unions’ Involvement in Florida Land Deal Scheme
Washington, D.C. (Sept. 6, 2007)—Camden R. Fine, president and CEO of the Independent Community Bankers of America (ICBA) said credit union involvement in a Florida real estate scheme illustrates how far credit unions have moved from their original mandate to serve low- and moderate-income families and into risky business loans.
"The unfolding situation, where tax-exempt credit unions around the nation invested in a Florida real estate scheme called "Millionaire University" is a wake-up call on an industry lobbying heavily to further expand their commercial lending powers. Many credit unions were involved in this out-of-state commercial loan scheme that was far removed from serving their common bond membership and that eventually may cost the National Credit Union Share Insurance Fund millions of dollars in losses.
"Tax-exempt credit unions are not taxpaying banks and should not be investing in such deals.
"Congress explicitly placed limits on the types of lending tax-exempt credit unions can do for a good reason - so credit unions can focus their efforts on serving people of modest means with a common bond. Unfortunately, this unfolding Florida scheme is a prime example of how credit union activities have strayed far from that mission.
"There is a clear lesson to be learned here. Congress should reject the credit unions' aggressive power grab in the Credit Union Regulatory Improvement Act (H.R. 1537) that would nearly double their commercial lending powers and allow the credit union industry to stray even further from its tax-exempt mandate."
A comprehensive study by the Tax Foundation concluded that credit unions are not using their generous $31 billion federal tax subsidy to help low-income people.
The Independent Community Bankers of America, the nation’s voice for community banks, represents 5,000 community banks of all sizes and charter types throughout the United States and is dedicated exclusively to representing the interests of the community banking industry and the communities and customers we serve. For more information, visit www.icba.org.