WASHINGTON – In a unusual political situation, two of the three credit union giants that would come under the new consumer financial protection agency are saying they are okay with that, even while the two credit union lobby groups, CUNA and NAFCU, are committed to fighting Congress to exempt them from the scheme.
“I am in favor of CFPA, absolutely,” said Frank Pollack, president of $14 billion Pentagon FCU. “I actually think credit unions are going to come out looking good.”
Both Pollack and Jim Blaine, president of $20 billion North Carolina State Employees’ CU, said they do not object to a proposed exemption for credit unions under $10 billion and will not join lobbying efforts to raise the exemption to include all credit unions. “We don’t object to being brought under CPFA. We’re 100% behind it,” said Blaine, who noted that his credit union is already examined by as many as a dozen government agencies, from NCUA, to the Federal Trade Commission, to the Department of Housing and Urban Development, as well as state credit union supervisors.
The third of the three affected credit unions, $45 billion Navy FCU, said it does favor an exemption for all credit unions, which would leave NCUA as its examiner for consumer compliance. A Navy Fed spokesman said the nation’s largest credit union feels that credit unions should not be brought under the CFPA because they did not cause the financial crisis and are in favor of boosting the exemption to $50 billion, to be indexed to inflation.
The situation leaves the two credit union lobby groups in a peculiar position.
CUNA is committed to pushing to exempt the three giants, even though it only represents one of the three, SECU [Navy and Pentagon have disaffiliated from CUNA]. None of the three powerful credit union heads have asked CUNA to lobby for the exemption.
Only one of the two represented by NAFCU [SECU is not a NAFCU member] wants the trade group to lobby for the increased exemption.
Ryan Donovan, senior lobbyist for CUNA, said it will continue to stress the principle of a unified position for credit unions. “As a matter of policy we don’t like credit unions separated by asset size,” he told Credit Union Journal. For many years, the banking lobby has tried to split the credit union movement by arguing to Congress that large diversified credit unions should be subject to taxes.
CUNA also noted that as many as 10 other credit unions could hit the $10 billion mark over the next few years and would be subject to the CFPA under the current proposal.
NAFCU President Fred Becker agreed. “We don’t think credit unions should be divided on the basis of asset size,” said Becker, who said NAFCU will continue to lobby Congress to get all credit unions brought under the exemption from CFPA.
