State Banker Associations Call for Increased CU Oversight in Joint Letter to Congress

A group of 51 state bankers associations sent a letter Wednesday to the leaders of the Senate Finance Committee and House Ways and Means Committee calling for a review of the credit union industry to determine whether it is living up to its statutory mission of serving people of “small means.” The group, representing all fifty states and the Commonwealth of Puerto Rico, also called for a thorough examination of the NCUA and its oversight of the credit union industry.

Citing research from an American Bankers Association commissioned study released in June, the state associations raised concerns that modern credit unions are actually contributing to greater economic inequality and endangering taxpayers by increasingly providing services to high-income customers rather than low- to moderate-income ones, making high risk loans, buying up taxpaying banks, and that the NCUA has enabled the credit union industry to creep far beyond its statutory authority while allowing regulatory capital requirements and other safety and soundness rules to become substandard.

Not surprisingly, the letter fails to disclose that the research cited was commissioned by the American Bankers Association which throws into question its objectivity.