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RANCHO CUCAMONGA, Calif. – California Credit Union League President/CEO David Chatfield didn’t mince words in denouncing appeals from the leadership of the Federal Deposit Insurance Corporation to tax and impose community reinvestment regulations on credit unions. Echoing comments made by CUNA President/CEO Dan Mica in his letter to FDIC Vice Chairman John Reich concerning comments the agency official made in his testimony at the Senate Banking Committee hearing June 21 on regulatory relief, Chatfield said such advocacy was “inappropriate” for the regulator of the for-profit banking industry. “We are extremely disappointed that not only the chairman but now the vice chairman of the FDIC have a history of publicly commenting on policy issues affecting credit unions, when they have no regulatory authority over nor experience in working with credit unions,” he said. “The FDIC recently announced that the nation’s banks again enjoyed another consecutive quarter of record-setting profits, and Chairman Donald Powell described the industry’s health as `excellent.’ Those aren’t the sorts of pronouncements we’d expect to hear if credit unions were affecting bank safety and soundness. The FDIC is sounding more and more like a cheerleader for the banking industry than an impartial regulator,” Chatfield said. Chatfield called attention to the fact that Reich’s comments were the second time in June that the FDIC leadership called on Congress to, as Reich put it in his testimony, “re-examine and seek to resolve” the “number of advantages” that credit unions have over banks and thrifts. Last year, Chairman Powell spoke to a meeting of America’s Community Bankers and told them that credit unions should pay state and federal taxes. “As a former NCUA Board member, I understand that the words of a federal regulator carry a great deal of weight on Capitol Hill and in the media. The NCUA does not advocate changes to bankers’ powers and authorities before Congress, and the FDIC should follow its example,” said Chatfield. Noting that a U.S. Treasury study in 2001 found that credit unions operate under statutes and rules “virtually identical to those applicable to banks and thrifts,” and that in some cases credit union regulations are stricter than bank regulation, Chatfield said, “Credit unions respectfully suggest that if the leadership of the FDIC cannot confine itself to its regulatory role of commenting on bank safety and soundness, the message it should convey to bankers is simple: if you think credit unions have all the advantages, you are free to convert charters and become a credit union.” -

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