WASHINGTON — The Credit Union National Association is urging Senate leaders not to pass an extension of the Transaction Account Guarantee program, arguing that it's no longer necessary and hasn't boosted business lending.
The financial services industry is divided over the TAG program, which is set to expire at the end of the month.
Groups like the American Bankers Association and the Independent Community Bankers of America are pushing to renew the crisis-era guarantee, while some influential financial institutions are fighting it. Money-market funds and some large banks could also benefit from its expiration.
CUNA now joins groups like the Financial Services Roundtable, a trade group for the largest banks, in opposing the extension.
"Congress should allow TAG to expire because it is no longer necessary; it is risky; it has not proven to enhance bank business lending; and there are better policy options to help small businesses access credit," wrote Bill Cheney, president and chief executive of CUNA, in a Dec. 3 letter to Senate leaders.
The move was likely retaliation against small banks for adamantly opposing a credit union bill that would double their business lending cap to 27.5% of assets. In his letter, Cheney suggests that Congress drop a TAG extension and pass their bill instead.
"The fact of the matter is that if Congress wants to enhance and expand access to credit for small businesses, there are a number of other policy options it should pursue, including S. 2231, the Small Business Lending Enhancement Act," Cheney writes.
Banking groups have already opposed suggestions that the credit union lending bill be paired with the TAG extension.