A group of 51 state bankers associations wrote to congressional leaders today calling for a review of the credit union industry to determine whether it is living up to its statutory mission of serving people of “small means.” The groups also called for a thorough examination of the National Credit Union Administration and its oversight of the credit union industry.
Citing research from a recent Federal Financial Analytics report commissioned by the American Bankers Association, the groups raised concerns that modern credit unions are actually contributing to greater economic inequality and endangering taxpayers by increasingly providing services to high-income customers rather than low- to moderate-income ones, making high risk loans and even buying up taxpaying banks. Even more alarming, the report found that the NCUA has enabled the credit union industry to creep far beyond its statutory authority, while allowing regulatory capital requirements and other safety and soundness rules to become substandard.
“Each of these actions have economic equality implications, fueling greater risk while driving credit union resources to higher return products not directed to serving people of modest means,” the associations said.