WASHINGTON — Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, expressed her support for two credit union bills at an industry conference on Wednesday.
The California Democrat said she would back proposals, reintroduced earlier this month, to double a credit union lending cap to 27.5% of assets and allow institutions to access supplemental forms of capital. Currently, credit unions are only able to raise their net worth via retained earnings.
"As you know, the influx of credit union members in last few years has been a mixed blessing. You have also seen your net worth decrease, simply because your retained earnings have not been able to keep pace with the growth in deposits," Waters said at the Credit Union National Association conference here. "In this low-rate environment and slow recovery, it's difficult to build a capital cushion only with retained earnings. So long as there are appropriate safeguards, credit unions should be able to value net worth using a broader array of products."
Waters also said that raising the cap on small business lending could help thousands of small businesses employ more workers.
"When the cap is raised, credit unions will be able to lend in ways that may lower the high employment rates in many of our communities," she said.
She added: "I want you to know that you have a friend in the Congress of the United States of America. As ranking member of the Financial Services Committee, you can count on me to look out for you."
The banking industry, meanwhile, continues to oppose both credit union bills and the industry's tax-exempt status. The American Bankers Association wrote a letter to lawmakers on Monday warning that many large credit unions are now "banks in disguise" and should have to play by the same rules.
The sharp divide between banks and credit unions, two key constituents for many lawmakers, continues to be a roadblock for legislation like the two credit union bills. Senate Banking Chairman Tim Johnson, D-S.D., eluded to those ongoing tensions in a video statement presented at the conference.
"Because of its controversial nature, and how community banks and credit unions view this proposal differently, I hope any bill that Congress may consider promotes safe and prudent lending by financial institutions of all types, as well as fair competition, consumer protection, and access to credit for American families and businesses," Johnson said.