Candidate Aguilar Talks Arrowhead, RBC
CUNA-backed congressional candidate Pete Aguilar (D-Calif.), mayor of Redlands, Calif., told CU Times the increased capital requirements in the NCUA’s risk-based capital proposal could have a negative impact on the credit union system.
Aguilar, a former Arrowhead Central Credit Union executive, is projected to advance to the general election after taking second place in the CA-31 primary election behind Republican Paul Chabot.
Rep. Gary Miller (R-Calif.), who currently holds the seat, announced his retirement earlier this year.
CUNA’s Political Action Committee, CULAC, contributed $10,000 directly to the Aguilar campaign and conducted an independent expenditure, which consisted of direct mail pieces, digital ads, Pandora online radio ads and a website aimed at likely voters.
CUNA Vice President of Political Affairs Trey Hawkins said CULAC spent slightly more than $197,000 on the effort.
CU Times asked Aguilar on Monday if he supports the NCUA’s proposed risk-based capital rule, which would impact credit unions with more than $50 million in assets. Aguilar said he has not read the full proposal but offered his opinion on the agency increasing capital rates above the currently required 7% net worth ratio.
“When you raise the capital rates, it comes at the expense of something. I mean, it’s just simple math – that’s value to credit union members that you could be passing on with increased rates for share accounts or reduced interest rates on mortgages or auto loans and that’s just the math of the situation,” Aguilar said.
He added that credit union members would feel the impact of increased capital requirements.
“I think raising (capital requirements) could have a negative impact on credit unions’ competitiveness because it forces them to hold capital back instead of putting it out into the communities and back to their members,” he said.
“Those are real dollars that aren’t being able to be spent to bring value for members and that’s what concerns me,” Aguilar also said.
CU Times also asked Aguilar if he thought the NCUA’s decision to place his former credit union into conservatorship was appropriate.
“I think history will be the judge. Obviously Arrowhead is in a pretty good financial position from a capital perspective. Arrowhead was a product of the communities in which they lend to as all local credit unions are,” Aguilar said.
“When the local economy is having difficulties – just like an employee-sponsored credit union, when there are difficulties like layoffs and closures – you would expect their members to have issues as well and I think that’s what happened to Arrowhead,” he added.
As director of government affairs and community development at the credit union, Aguilar said he was not involved in a lot of the discussions with the NCUA.
He told CU Times that former chief executives or board members could better answer any questions about the conservatorship.
“I enjoyed my time working for the credit union. The people I came to know in this community and also in the credit union industry were absolutely top-notch,” he said. “They were concerned about lending to small businesses and how we help working families.”
When asked if he has a legislative agenda for credit unions, Aguilar pointed out that areas in his district have some of the highest unemployment and poverty rates in the country.
“This area is absolutely poised to have conversations with financial institutions and lenders on how we help consumers, so if any financial institution comes knocking at my door talking about proposals that will help our communities, I’m all ears,” he said.