CBAI Urges NCUA to Withdraw its Field of Membership Proposal

CBAI responded forcefully to the National Credit Union Administration’s (NCUA) proposed expansion of its field of membership rule and urged its immediate withdrawal. The proposed rule is being framed by the NCUA as regulatory relief versus what it really is -- a wholesale charter enhancement. It’s the latest in a series of industry efforts in that direction. The sweeping changes in this proposal would dramatically extend the credit union tax-advantaged status over taxpaying community banks.

NCUA stated that this proposed rule represents the most sweeping change in membership in the NCUA’s 45 years history. Its vice chairman indicated that the reason for the proposal was due to a deadlocked Congress. Apparently, quasi-legislative actions can now be justified by unelected NCUA bureaucrats. However, this proposed rule is a clear and intentional end-around Congress and disregards congressionally-imposed and established rules to assure that credit unions adhere to their original mission.

CBAI’s Vice President Federal Governmental Relations, David Schroeder, reinforced CBAI’s and the tax-paying community bank position on the proposed rule during his quarterly visit to Washington in early February. Schroeder highlighted to the entire Illinois congressional delegation this blatant end-around Congress and encouraged members to voice their concerns to the NCUA about this misguided proposal.

If credit unions want to weaken (so as to virtually eliminate) the common bond requirement and operate like banks, they should be taxed like banks and required to meet all of the same regulatory requirements as banks. They can't have it both ways.

Credit unions were never meant to be tax-exempt community banks!

Read CBAI Comment Letter.

February 16, 2016