The credit union industry will come under the House Banking Committee's scrutiny during hearings scheduled to begin Sept. 29.

"It is high time that Congress reviewed the financial condition of the credit union industry to ensure that taxpayers are protected," committee Chairman Henry B. Gonzalez, D-Tex., said in a release Monday.

National Credit Union Administration Chairman Norman E. D'Amours and General Accounting Office Comptroller Charles Bowsher have been invited to testify at the hearings, which could last four days, a House Banking Committee staff member said.

Meanwhile, the industry can expect further attention on Capitol Hill this month. Senate Banking Committee Chairman Donald Riegle has asked Mr. D'Amours to testify at a Sept. 22 hearing on oversight of financial institutions.

And on Sept. 21-22, the House Banking subcommittee on consumer credit and insurance is expected to hold hearings on extending the Community Reinvestment Act to nonbanks, including credit unions. Subcommittee Chairman Joseph P. Kennedy 2d has said credit unions should comply with the act.

Rep. Gonzalez launched a probe of the industry in January after disclosures that U.S. Central Credit Union invested $255 million in a troubled Spanish bank. But the investigation widened to include other issues, such as customer base expansions and interlocks between corporate credit unions and trade groups.

"It's time to take a critical look at credit unions - and that's not to say there's anything wrong with them," said a House Banking Committee staff member. "We spend a lot of time with banks and thrifts and very little with credit unions. Not a lot of people realized that corporate credit unions don't have the same limits on investments that regular credit unions do."

Corporates invest the surplus funds of regular credit unions. Unlike ordinary credit unions, some corporates - including U.S. Central - can invest overseas.

In March, Rep. Gonzalez said he might introduce legislation to tighten regulation of the corporates.

In his Aug. 29 letter, Rep. Gonzalez told Mr. D'Amours to provide written testimony on NCUA's regulation of corporates, community development credit unions, and a summary of problems encountered during the construction of NCUA's new headquarters in Alexandria, Va.

A study by the NCUA's inspector general said the agency might have been overcharged several million dollars during the construction of its headquarters, completed last year.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.