WASHINGTON—The president of the American Bankers Association is continuing his assault on NCUA and credit unions, this time in an op-ed in The Hill Thursday in which urged Congress to take action against “a runaway regulator.”
ABA President Frank Keating, as he has in the past, again cited CUs’ tax exemption and that they enjoy a “compliant federal regulator that often acts like a cheerleader for the industry it is supposed to be supervising.”
The opinion piece ran in advance of NCUA Chairman Debbie Matz’s appearance Thursday afternoon in front of the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit
Keating focused on NCUA’s MBL proposal, citing it as an example of the regulator’s leniency.
“If there were any doubts about this advantage, they ought to be permanently banished by the National Credit Union Administration’s June proposal to gut limits on business lending by credit unions,” wrote Keating. “The proposal is just the latest in a long string of actions by the credit union industry and its partisan regulator to make it easier for credit unions to expand their commercial portfolios.”
Keating pointed to CU MBL growth as an issue, saying, “This growth should concern all members of Congress, as it came in spite of a 12.25 percent cap that Congress in 1998 imposed on the percentage of credit union assets that could be allotted to business loans. Congress acted out of concern that credit unions should focus on their mission of serving consumers of modest means rather than businesses.”
In closing Keating addressed Matz stating the agency wants to move away from prescriptive regulatory limits to general principles.
“Clearly, it is inconvenient for NCUA that those ‘prescriptive limits’ were set by Congress,” said Keating. “When Matz testifies today before the House Financial Services Committee, lawmakers should insist that she and NCUA follow the law. If NCUA gets away with further eroding the already tenuous limits on member business lending, it will eliminate another distinction between credit unions and banks—and further undermine credit union lobbyists’ argument that they should pay no federal taxes, even when our citizens face an $18.3 trillion national debt.”