In a letter to congressional leadership today, ABA and the Independent Community Bankers of America spoke out against the National Credit Union Administration’s proposal to loosen its field of membership restrictions. The groups warned that the proposed expansion would effectively allow credit unions to operate as tax-exempt banks and have significant, wide-reaching policy implications.
“Radical expansion of credit unions poses a major threat to the viability of taxpaying community banks from coast to coast, while adding to the federal deficit in lost tax revenue,” the letter said. “We urge Congress to aggressively exercise its oversight function and reorient this out-of-control agency.”
Under the NCUA proposal, credit unions would be able to serve “local” and “well-defined” areas that stretch the definition of both terms beyond reason — including labeling whole states as local areas in some cases – and open the door for credit unions to redline underserved urban cores in favor of wealthy suburbs.
“These quasi-legislative actions are being pursued by unelected bureaucrats because, in the words of NCUA’s vice chairman, ‘Congress is deadlocked’ on these issues,” ABA and ICBA said. “NCUA is stealing the province of the legislature, in full view and without apology.”