“Yet one more example of this regulatory cheerleader’s focus on agency self-preservation.”
Washington, D.C. (Oct. 27, 2016)—The Independent Community Bankers of America® (ICBA) today expressed strong opposition to the new National Credit Union Administration (NCUA) final rule and its new proposed rule, which would drastically expand the powers of tax-exempt credit unions beyond their statutory limits. ICBA is reviewing the final and proposed rules and will determine appropriate next steps to stop the credit union’s excessive mission creep.
“NCUA’s action today is the latest example of the captive regulator inappropriately and illegally extending the industry’s taxpayer-subsidized competitive advantage—further demonstrating its credit union industry cheerleading status,” ICBA President and CEO Camden R. Fine said. “If credit unions want to eliminate the common bond requirement and operate like banks, they should be taxed like them and required to meet the same set of regulatory standards. They can’t have it both ways.”
In a comment letter filed earlier this year, ICBA wrote that the NCUA’s planned expansion of field-of-membership rules would violate the Federal Credit Union Act and further erode any meaningful distinction between tax-exempt credit unions and taxpaying community banks. The proposal would significantly ease the field of membership requirements for all charter types but particularly for multi-common bond credit unions and community credit unions to the point that the restrictions would become essentially meaningless. In fact, the new NCUA proposal even goes so far as to “quadruple down” on the expansion by raising the local community population limit from the current 2.5 million to 10 million.
ICBA has long warned that these changes will result in much larger credit unions serving larger and more geographically diverse areas. ICBA will continue to fight this egregious expansion.
ICBA filed a lawsuit against the National Credit Union Administration (NCUA) in September, challenging the agency’s unlawful commercial lending rule issued earlier this year. If allowed to stand, the NCUA’s final rule would allow tax-exempt credit unions to exceed limitations on commercial lending activity established by Congress while relaxing regulatory oversight—putting consumers and the financial system at risk.
“The NCUA should focus on enforcing the law—not carrying water for the industry it is charged with regulating,” Fine said. “The action taken today is yet one more example of this regulatory cheerleader’s focus on agency self-preservation. ICBA will continue to push back forcefully against the NCUA’s rubber stamp approach to regulating the credit union industry. The financial system should not operate with regulatory agencies like the NCUA having their thumbs on the scales.”
The Independent Community Bankers of America®, the nation’s voice for nearly 6,000 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services.