Community bankers have for years warned of the expansion of credit union powers, but Navy Federal Credit Union’s new “Community Bank” brand indicates credit unions recognize they’ve gone too far, ICBA President and CEO Rebeca Romero Rainey writes in a new LinkedIn post.
‘Community Bank’ Program: Noting that the $165 billion-asset institution is calling its new program to serve overseas military installations "Community Bank, Operated by Navy Federal Credit Union," Romero Rainey says Navy Federal appears to be trying to mask that it is a global financial institution that does not pay taxes or meet the same level of regulatory standards as real community banks.
Call to Action: “With large credit unions now apparently insecure enough about their industry to want to pretend they’re community banks, Congress should use this opportunity to investigate the nation’s outdated credit union policies — and whether the government should continue subsidizing acquisitions of real, local, taxpaying community banks,” Romero Rainey writes.
Increased Attention: Romero Rainey’s post follows a recent Politico column drawing attention to the lack of regulatory transparency at credit unions, particularly their exemption from overdraft reporting rules. Also last week, Federal Reserve Governor Michelle Bowman said credit union acquisitions of community banks support the case for including credit unions in regulatory policies on proposed bank mergers, as ICBA has advocated.
More on Credit Unions: Following a recent series of credit union acquisitions of community banks, ICBA:
Launched new targeted ads and a website making clear to consumers that “Something’s Wrong” with credit union policy.
Conducted an ad campaign directing congressional offices to questions they should ask credit union executives in Washington for advocacy meetings.
Renewed its call for Congress to act on credit union bank acquisitions.
Grassroots Resources: Community bankers can use ICBA’s Be Heard grassroots action center to call on their members of Congress to hold a hearing on the NCUA’s lax oversight. Additional resources—including state fact sheets, a messaging playbook, and a customizable op-ed—are available on the ICBA website.