WASHINGTON–Following a hearing in the House of Representatives during which the chairman of the FDIC suggested CU acquisitions of banks are a “concern” and questions related to CUs and CRA were asked, CUNA said statements made by the FDIC chair were "inaccurate and misinformed."
Jim Nussle
As CUToday.info reported here, NCUA Chairman Rodney Hood and FDIC Chair Jelena McWilliams appeared before the House Financial Services Committee and several members of Congress asked both about their “concerns” over credit unions buying banks.
Hood responded by saying “These are voluntary, market-based transactions.”
But after being pressed by one congressman, McWilliams responded, “I think there might be a problem.”
Later in the hearing another House member suggested the largest credit unions should be subject to CRA.
CUNA Letter
In response, CUNA has sent a letter to the FDIC’s McWilliams to express concern the remarks made. CUNA headlined its press release, "Credit union-bank merger concerns are inaccurate and misinformed."
“While still extraordinarily rare relative to the number of bank mergers, credit union-bank transactions take place because they are good business decisions for the parties involved, as well as the consumers, small businesses and communities involved. Consumers benefit by gaining access to strong, responsible community-focused financial services,” CUNA President/CEO Jim Nussle wrote. “Communities benefit because credit unions provide more than $4 billion in indirect consumer benefits, especially in underserved areas that often have no other affordable option for financial services. And, clearly, bank investors benefit, or why would the bank sell in the first place?”
Nussle’s letter further states that of the 30-plus credit union-bank transactions since 2012, more than 80% have been conducted by credit unions that have a specific focus on low-income families.
Response on CRA
Meanwhile, on the issue of CRA, Nussle wrote, “Simply put: banks were redlining and credit unions weren’t. This law was enacted to encourage banks to meet the needs of consumers in their communities that had been intentionally ignored and to reduce discriminatory lending practices, or ‘redlining,’ the ramifications of which still plague our country today. Since their inception over 100 years ago, credit unions have continually offered full and fair service to their members, including those at low- and moderate-income levels.”