Credit Union Trades Cite Greed as ABA `Final Four' Motivator
WASHINGTON-Appealing to the basketball fans in Congress, the American Bankers Association circulated a memo on Capitol Hill asking for an end to the credit union madness. CUNA President and CEO Dan Mica called the ABA's latest effort to block the Credit Union Regulatory Improvements Act (H.R. 2317) "offensive at the...
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WASHINGTON-Appealing to the basketball fans in Congress, the American Bankers Association circulated a memo on Capitol Hill asking for an end to the credit union madness. CUNA President and CEO Dan Mica called the ABA’s latest effort to block the Credit Union Regulatory Improvements Act (H.R. 2317) “offensive at the worst, and childish and immature at best.” On Monday, ABA President and CEO Edward Yingling sent a March Madness-themed memo to members of the House of Representatives citing the “Final Four Reasons to Oppose Credit Union Bill H.R. 2317.” An advertisement that ran simultaneously in a Capitol Hill newspaper features a basketball surrounded by four quotes taken from the Nov. 3 Ways and Means Committee hearing. “If credit unions want to be banks let them change their charters to cooperatively-owned mutual savings banks, as nearly thirty have done,” Yingling wrote in an accompanying memo. “But it is madness to allow a group of credit unions to undermine their historic mission of serving people of modest means by pursuing multimillion dollar business loans, let alone increasing the risk to safety and soundness in the credit union industry.” The ABA asserted that the largest credit unions are the ones really pushing for CURIA. “For this group of non-traditional credit unions, their primary mission is to grow and become more bank-like, while continuing to remain tax-exempt. That is why these credit unions are lobbying for [CURIA].” “PROFIT, PROFIT, PROFIT – Do I have your attention? This is what the banks are after.” NAFCU Director of Political Affairs Murray Chanow wrote in a memo, defending CURIA. “These are the same banks that year after year make record profits-profits that come from charging excessive fees on America’s consumers-and then turn around and give them to their executives and board members.” He pointed out that even while the ABA is claiming credit unions are not serving those of modest means, the group is suing NCUA to further restrict credit union service in underserved areas. “Frankly, the banking industry should be embarrassed by their trade association’s approach,” Mica added in a letter to the Hill. “There are so many issues affecting our nation’s consumers-data security including credit card fraud and ID theft; flood insurance reform; and housing tax credits-that wasting the Congress’ time with stunts like this only highlights bankers’ lack of understanding of the needs of America’s consumers.” He explained that the legislation is backed by 25% of House members and grants greater flexibility in business lending as well as reforming capital requirements “to better reflect market conditions.” Chanow pointed to a Treasury study of member business lending that found that 59% of credit union business loans were under $50,000, that credit unions fill a specific niche, and do not pose a “threat to the viability and profitability of other insured depository institutions.” He continued, “We need to continue to give small businesses a choice when seeking affordable loans and not limit their ability to acquire capital.” What is “maddening” to Chanow, he said is, “At the same time that banks continue to make record profits and lobby for more corporate welfare, we have seen many banks converting to Subchapter S status. What does this mean? Simply put, currently there are over 2,249 Subchapter S banks, of which 1,174 pay no taxes. So at the same time the bankers are trying to tax credit unions, they continue to find ways not to pay any themselves.It is unfortunate that the banks cannot find a way to work with credit unions to benefit America’s consumers.” Mica agreed, “Let’s get on with the business of the people, and ignore the games of the extremists in the banking industry.” Consumers expect their credit unions to provide “the best service possible. Not as banks, not as thrifts-but as cooperatively owned, not-for-profit, volunteer-directed financial institutions.” -
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