In a joint letter with the Independent Community Bankers of America and the National Community Reinvestment Coalition today, the American Bankers Association urged lawmakers to schedule an oversight hearing for the National Credit Union Administration, in light of several recent NCUA rulemakings that the groups said “would undermine important statutory guardrails designed to protect low-income consumers.” The groups noted that an NCUA-specific congressional hearing has not been held since 2015.
The letter came one day before NCUA is set to finalize a new rule that would expand the definition of “service facility” for common bond credit unions, enabling them to add groups to their fields of membership on effectively a national basis—disregarding the statutory requirement that credit unions be in “reasonable proximity” to the customers they seek to serve. The NCUA board appears likely to approve the rule even amid opposition from the current Democratic NCUA Chairman Todd Harper and former chairman Mark McWatters, a Republican. Previously, NCUA finalized another controversial rule—which Harper also opposed—expanding the range of permissible lending activities for credit union service organizations, or CUSOs.
In addition to ensuring proper oversight of NCUA, the groups also called on Congress to take “the next logical step” and subject the credit union industry to the Community Investment Act regulations to which banks must adhere.
“Credit unions are not held accountable to fulfill community reinvestment activities, creating a regulatory inconsistency between banks and credit unions, even though both take deposits and should thus have similar requirements to meet needs and conveniences of the communities where they operate,” the groups wrote. “Absent such expectations, some credit unions are not making efforts to invest in lower-income areas.”