NAFCU has sent a letter to Senate Banking Committee Chairman Richard Shelby refuting FDIC Vice Chairman John Reich's recent testimony suggesting CUs have an unfair advantage over banks.
Reich's testimony, submitted to the Senate Banking Committee hearing on regulatory relief, argues that NCUA's approval of "ever-expanding fields of membership," combined with the ability to offer a full range of products and services without having to pay federal taxes and without laboring under the Community Reinvestment Act gives CUs advantages that "make for an uneven playing field, a condition that Congress should re-examine and seek to resolve."
But NAFCU's letter suggests this simply isn't true, noting that: credit unions continue to hold just 1.4% of domestic financial assets, as they have for the last 25 years; a Treasury study concluded that "credit unions are not a threat to the viability and profitability of other insured institutions"; and the commercial banking industry continues to rake in record-breaking profits, among other points.
Moreover, NAFCU asserted, CUs were exempt from CRA because they were not engaged in "red-lining" as were banks. "In conclusion," NAFCU writes, "credit unions do not have a competitive advantage over banks. In fact, credit unions are more highly regulated than any other type of financial institution."
