WASHINGTON - Echoing the sentiments-and, in part, the exact words-of Senate Banking Committee Chairman Phil Gramm's (R-Texas) June 5 letter to the NCUA Board, four of five House Banking Committee subcommittee chairpersons blasted NCUA Board Chairman Norman D'Amours in a look-alike June 29 letter, declaring "absolute opposition" to the agency's recently passed, proposed community action plan (CAP) for federal community charter credit unions. And in a related development, NAFCU President Fred Becker Jr. declined to support a CUNA initiative seeking extension of the CAP comment period because such a move could also possibly postpone implementation of CU regulatory relief provisions attached to CAP. "My main concern with that would be," Becker said, "how it affects IRPS-00 (the relief proposal). I would hate to see IRPS-00 delayed further. But if this resulted in the breaking off of the CAP proposal...that would be fine with us. But again we don't want to see the delay of IRPS-00." But in their combined letter labeling-as did Gramm-the CAP initiative an "absurd regulatory requirement," Reps. Marge Roukema (R-N.J.), Spencer Bachus (R-Ala.), Peter King (R-N.Y), and Richard Baker (R-La.) told D'Amours that CAP was "unnecessary and harmful to credit unions, and...in direct conflict with the law passed as part of the Credit Union Membership Access Act." Of all the House Banking Committee subcommittee chairs' names, only that of Housing and Community Opportunity Subcommittee Chairman Rick Lazio (R-N.Y.), who is running against Hillary Rodham Clinton in the New York senatorial race, did not appear on the letter. The controversial proposal, which is also being vigorously contested by the CU trade associations, was approved for 60-day public comment as part of an otherwise well-received regulatory relief initiative at the June 6 NCUA Board meeting. It would require federal community charter CUs-under threat of disciplinary action-to document and implement member service outreach plans for their entire FOMs. "In adopting such a proposal," the letter archly reads, "the NCUA would appear to be arrogating to itself the task for making laws. The responsibility of the agency you serve, is to enforce the laws passed by Congress. We are deeply concerned about this." Suggesting that CAP smacked of bank-like "Community Reinvestment Act (CRA) style requirements, the letter went on to state that the "proposal to require credit unions to maintain an updated `community action plan' and then to assess penalties against credit unions based upon their performance under the plan is not authorized by law, and was specifically rejected by Congress during the House action of H.R. 1151...." "As you know, by their very nature, credit unions serve their communities," the letter continues. "They cannot and must not serve anyone else. Is there evidence that credit unions are doing a poor job of serving all their members' earnings to try to attract new members that have rejected joining a credit union in the first place? What is the real problem? "Credit unions should not be subjected (to) an unnecessary regulatory burden and (to) the fear that they could face undetermined supervisory actions based upon subjective judgments of government examiners and regional credit union directors (over) standards inconsistent with the NCUA statutes and the very nature of credit unions themselves." "There seems to be a fairly united reaction (against CAP) by the majority on the Hill," stated CUNA Vice President, Legislative Affairs John McKechnie, referring to the letter. "All the letters make a good point that this kind of a CRA-like approach was already rejected once in the last Congress." Asked for the reaction of his members to CAP, Becker told Credit Union Times that they were opposed to CAP. "Again, we're very disappointed that it was attached as a part of the IRPS-00," Becker amplified, "and our view (is) that it should not be a part of that proposal. It, in essence, deflected the attention away from the advantages of IRPS-00 into this other proposal that we're concerned may cause credit unions to again convert (from federal to state charters)." Contacted for NCUA reaction to the combined subcommittee letter, an agency source said it was too early for comment, but added that it was significant that all the signees were Republican. -
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