Washington, D.C. (May 7, 2020) — Independent Community Bankers of America® (ICBA) President and CEO Rebeca Romero Rainey released the following statement on today's National Credit Union Administration changes to its low-income credit union designation.
"Today's sudden National Credit Union Administration move to change its methodology in designating low-income credit unions benefits neither low-income Americans nor military personnel—but the largest, most growth-obsessed credit unions, which continue to be subsidized by taxpayers.
"The NCUA's changes—made without a formal rule subject to public review and comment—is another example of this captive regulator expanding the powers of credit unions well beyond the limits established by Congress to justify their tax exemption.
"As the NCUA admitted after authorizing these changes with the stroke of a pen in the middle of an economic crisis and global pandemic, the agency has provided the nation's largest credit unions: free rein to allow outside investors to exploit their tax subsidy, unbridled commercial lending authority despite the credit union industry's taxi-medallion scandal, and the ability to accept non-member deposits. In other words, these large financial firms may operate like full-service banks on a national scale while continuing to pay no federal income tax.
"While community banks continue to outnumber credit unions in low-income communities, today's action will benefit institutions like Pentagon Federal Credit Union, whose partnership with Goldman Sachs to finance a luxury mixed-use real estate development in the nation's capital contrasts sharply with the industry's founding purpose—serving people of modest means with a common bond.
"ICBA strongly encourages Congress to investigate today's NCUA designation and to re-examine the credit union industry’s tax and regulatory subsidies. It is long past time for Washington to wake up and open its eyes to these financial firms' risky practices and irresponsibly lax oversight."
About ICBA
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ nearly 750,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5 trillion in assets, nearly $4 trillion in deposits, and more than $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 www.icba.org.
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