CBAI’s SVP Federal Governmental Relations, David Schroeder, was in Washington D.C. for his quarterly visit the week of July 15th. Schroeder informed the Illinois Congressional Delegation about important issues for Illinois community banks and also met with the Consumer Financial Protection Bureau and senior staff of the Independent Community Bankers of America (ICBA).
Topping the discussion agenda was credit union abuse, particularly the acquisition of tax paying community banks by tax-exempt credit unions. These acquisitions are just the latest example of credit unions staying far from their founding mission of serving individuals of modest means and with a common bond. Schroeder highlighted a new report from Federal Financial Analytics, stating that credit unions are increasingly serving middle- and upper-income households, have figured prominently in reports of predatory lending and benefit from less stringent safety and soundness regulations. Credit unions can’t have it both ways and there must be consequences for their actions.
Schroeder updated the Illinois Delegation about the status of the Federal Reserve‘s deliberation on its role in real-time payments. It is critically important for the Fed to be a real-time payments operator, regulator and hosting the payments directory to assure that community banks will have fair and equal access to an improved payments system. We cannot let the largest banks represented by The Clearing House to have a monopoly on (real time) payments – nothing good will come of that. The Fed along with the THC should share this responsibility (as they do now in the payments system) to provide choice, competition, checks and balances, innovation, security and redundancy which will assure access and fair treatment for all of the system participants including community banks, consumers, small business and agriculture.
Schroeder also urged the swift completion of the remaining sections of the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) and highlighted several pieces of legislation which will provide additional regulatory relief for community banks.