WASHINGTON-The military lobby is fighting a proposal that would charge the nation's largest institutions - including two of the three largest CUs - to wind down failed financial giants.
"While large banks can simply push added costs to their investors, every additional operating cost or systemic tax on credit unions translates to lower returns on savings and higher loan interest rates for military customers," said retired Vice Admiral Norbert Ryan, head of the Military Officers Association of America, of the proposal to charge institutions more than $10 billion - including Navy FCU ($40 billion) and Pentagon FCU ($14 billion) - to fund a new systemic risk regulator. A third credit union, $18 billion North Carolina Employees' CU, also would be charged.
The proposed new regulator would monitor all financial giants - those that pose a systemic risk, such as banks, insurers, mortgage companies and investment firms - and would be charged with unwinding their business after a failure. Fees would be assessed on all financial giants, those over $10 billion, to pay the costs of a failure.
NAFCU and CUNA are lobbying for a carve-out of some sort for credit unions.
