Press Releases

ICBA Urges Congress to Investigate Credit Union Abuses

Jun 05, 2019

National Credit Union Administration Failed to Prevent Reckless Lending

Washington, D.C. (June 5, 2019)—The Independent Community Bankers of America® (ICBA) today called on Congress to investigate the National Credit Union Administration's failure to prevent credit union lending abuses. In letters to the Senate Banking and House Financial Services committees, ICBA cited the NCUA's role in the taxi medallion scandal exposed by The New York Times, in which irresponsible lending dominated by half a dozen credit unions led to financial ruin for thousands of families as well as a spate of tragic taxi driver suicides.

"At the root of this fiasco is a failure of the NCUA to regulate and supervise," ICBA President and CEO Rebeca Romero Rainey wrote. "Lending concentration, abusive loan terms, and medallion prices inflated well above their fundamental value were obvious to industry observers, but the NCUA was deaf to the many warnings it received from the outside as well as from within the agency. In The New York Times series, one observer said the NCUA is more of a trade group than a regulator, further demonstrating that the agency clearly was and remains captured by the credit union industry."

ICBA's letter specifically urges the committees to convene hearings at their earliest convenience to explore the role of the NCUA in this scandal. A congressional investigation is urgently needed to induce the NCUA to keep an arm’s length from the tax-exempt industry it is charged with regulating, strengthen its oversight, and prevent future abuses, ICBA wrote.

ICBA noted that the taxi medallion scandal led to $750 million in losses to the taxpayer-backed National Credit Union Share Insurance Fund. Senate Minority Leader Charles Schumer (D-N.Y.) has called on the NCUA to conduct an immediate review of its supervisory practices regarding credit unions that engage in taxi medallion lending, while the NCUA’s inspector general has said the agency should improve how it monitors credit union loan concentrations in the wake of the scandal. Meanwhile, large credit unions are increasingly under congressional pressure to report financial information required of other tax-exempt institutions.

ICBA and community banks have long raised concerns about the NCUA’s regulatory capture and the competitive advantage it confers on an industry whose tax exemption is worth an annual cost to taxpayers of nearly $2 billion and rising. With many large credit unions increasing their taxpayer-subsidized footprint by buying up smaller, taxpaying community banks, ICBA will continue calling on policymakers to re-examine the credit union industry’s tax and regulatory subsidies and the NCUA’s efforts to drastically increase the powers of tax-exempt credit unions beyond their statutory limits.


About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 52,000 locations nationwide, community banks constitute 99 percent of all banks, employ more than 760,000 Americans and are the only physical banking presence in one in five U.S. counties. Holding more than $4.9 trillion in assets, $3.9 trillion in deposits, and $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at

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StokesAleis-5176r-5x7Aleis Stokes
SVP, Communications

Swann-8218Nicole Swann
VP, Communications