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ARLINGTON, Va.- NAFCU defended the safety and soundness of NCUA’s risk-based capital plan and other provisions of the Credit Union Regulatory Improvements Act (H.R. 2317) after the banking trades circulated a joint letter to all members of Congress opposing the bill. “NAFCU believes that the risk-based Prompt Corrective Action (PCA) model would allow credit unions to better serve their members as it allows other FDIC institutions to better serve their customers. Even with the revisions under the new system, credit unions would be subject to much higher capital requirements than banks,” NAFCU President and CEO Fred Becker wrote in his letter. CUNA released a statement previously as well in response to the letter sent by the American Bankers Association, America’s Community Bankers, and the Independent Community Bankers of America. (CU Times, March 8, 2006) In addition he pointed to a study done by the Treasury Department that showed credit unions’ business lending practices were safe, 59% of business loans were under $50,000, and pose no threat to other insured depository institutions. “Banks exist to make a profit and pay their shareholders,” Becker wrote. “In fact, the annual asset growth of the commercial banking sector for the last full year (2005) exceeded the size of the entire credit union community, with banks growing in one year by a magnitude that it took credit unions nearly a century to achieve.” So he asked, “Where’s the Beef?”

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