National Credit Union Administration Chairman Rodney Hood testified on his agency's recent announcement that it is changing its methodology for designating low-income credit unions.
In testimony for a Senate Banking Committee remote hearing, Hood noted that the change, which will benefit the largest credit unions, will free these tax-exempt entities from restrictions on member business lending, raising supplemental capital, and accepting deposits from non-members.
Ahead of the hearing and a separate House roundtable today, ICBA called on the committees to convene hearings on the change, which is being enacted without a formal rulemaking process. ICBA said the move sidesteps Congress and benefits the largest credit unions.
The NCUA last week said it will begin counting active-duty military personnel with Army or Fleet Post Office addresses as “low-income” individuals, which will benefit institutions like Navy Federal and Pentagon Federal.
ICBA will continue encouraging Congress to investigate the NCUA designation and to re-examine the credit union industry’s tax and regulatory subsidies.