WASHINGTON – The House rejected a protest from the credit union lobby Friday and passed a bill that will allow NCUA and the bank regulators reign in excessive executive pay packages at credit unions and banks.
The votes came a day after New York regulators released data showing that almost 4,800 executives earned at least $1 billion in bonuses last year, even as many were working for failing institutions that were receiving billions of dollars in government bailout funds.
In a rare joint lobbying effort, CUNA and NAFCU told House leaders in a letter that "unlike for-profit institutions, credit unions do not chase profit: therefore, they should not be grouped in legislation aimed at discouraging incentives that encourage risk-taking to chase profits."
House leaders, responding to protests form community bankers and credit unions, did agree to exempt institutions under $1 billion from the bill. But CUNA and NAFCU said it wasn’t enough. "We believe it is critical that not-for-profit institutions be treated differently than for-profit entities in this legislation," they said.
The bill would require NCUA and the other regulators to develop rules to prevent credit unions and banks form adopting executive compensation plans to encourage excessive risk-taking. Those with more than $1 billion in assets would have to disclose any incentive-based compensation plans.
