National Credit Union Administration Chairman Todd Harper recently stated that when it comes to people who manage credit unions, “their interest doesn’t always align with that of the members.” Yet it has been two decades since Congress held a hearing on the $2.2 trillion credit union industry, even as media reports raise questions about the lending practices of the nation’s largest credit union—Navy Federal Credit Union—and the industry’s top regulator expresses serious concerns about credit union oversight and priorities, the American Bankers Association’s Robert Flock writes in a new opinion column for American Banker.
“Credit unions themselves often evoke their humble beginnings as institutions rooted in close-knit communities where neighbors help neighbors,” Flock writes. “But those days have long passed.”
Harper recently announced that the NCUA plans to require credit unions with more than $1 billion in assets to report revenue from overdraft and nonsufficient fees, just like banks. Harper also acknowledged credit unions are not held to the same consumer compliance standards as the banks that some many of them are acquiring, and he questioned the practice of credit unions spending millions of dollars to buy stadium naming rights.
While dozens of some lawmakers have demanded investigations and hearings on Navy Federal, few have pushed for a review of the credit union industry as a whole. “Congress has a responsibility to ensure that America’s 140 million credit union members have visibility into the institutions they own,” Flock writes. “They also have a responsibility to taxpayers who subsidize these not-for-profit financial institutions.”
