Credit Unions March on Washington
The credit union lobby will be flexing its political muscle next week as some 2,500 "grass-roots lobbyists" rally in our nation's capital to lobby for expanded powers. The credit union lobbyists will ask Congress to approve legislation (HR 3579) nearly doubling the industry's statutory limit on commercial loans, called "member business loans," to 20% of assets. The bill would exempt from the cap loans under $100,000 and certain loans made to non-profit religious organizations.
ICBA strongly opposes this legislation, and urges community bankers to contact their members of Congress and urge them to put a stop to any further expansion of powers for this tax-exempt industry.
Remind your elected representatives that commercial lending is a highly specialized and risky business. Even the GAO-Congress' investigative arm-recently cited the need for greater risk management due to the growing concentration of industry assets in large credit unions. Lawmakers should consider whether the credit union industry has the management expertise and experience to properly and safely underwrite commercial loans.
The credit union industry's expansionist agenda is exacerbated as the credit unions continue to grow outside traditional common bonds. Since adoption of federal legislation (HR 1151) effectively abolishing the common bond requirement, nearly 600 credit unions have converted to community charters, allowing them to compete for business in the general population without regard to association or affiliation. In December 2003, alone, the NCUA approved five charter conversions for communities each in excess of one million people.
In addition to expanding commercial lending opportunities for credit unions, HR 3579 also would facilitate conversions to community charters, and allow credit unions to cash checks or wire funds for anyone, including non-members. Credit unions also are pushing HR 1375, the regulatory relief bill pending in the House that contains a number of provisions favorable to credit unions.
Call your representative and senators today (202-225-3121) and urge them to stand up to the credit union lobbyists and just say NO. If credit unions want bank-like powers, they should pay taxes and comply with CRA like we do.