GAO Issues Study on Credit Unions
A new study by the General Accounting Officer on credit unions has confirmed what community bankers have known for years-that credit unions are bigger than ever and are trying harder to compete with banks.
The GAO study shows that, because of the virtual elimination of the common bond for membership, increasing amounts of credit union assets are being concentrated in larger credit unions whose main mission is to compete with banks and not to serve individuals of modest means. The report raises questions about whether credit unions have lost interest in their historic goal of serving individuals from all segments of society.
GAO's analysis showed that commercial banks were more likely than credit unions to lend to individuals from low and moderate income areas. As a result of its analysis, GAO recommended that the National Credit Union Administration develop "indicators to determine if credit unions are reaching the underserved." In addition, to reduce risks to the insurance fund from the growing concentration of assets in large credit unions, GAO also recommended that Congress (1) make credit unions subject to the internal control reporting and attestation requirements that are applicable to banks and thrifts, and (2) give NCUA authority to examine third-party vendors.
Highlights of the report can be found at www.gao.gov.