The trade group representing the nation’s community bankers is asking leaders of the Senate Banking Committee to request a Government Accountability Office investigation of the credit union industry.
“A comprehensive and impartial study will help inform Congressional oversight of the NCUA and a tax-exempt industry that has broadly expanded its powers, rapidly grown its financial services market share, and consolidated into fewer, larger and riskier institutions,” Rebeca Romero Rainey, president/CEO of the Independent Community Bankers Association, wrote in a letter to Senate Banking Committee Chairman Mike Crapo (R-Id.) and the committee’s ranking Democrat, Sherrod Brown of Ohio.
The ICBA has been engaged in a high-profile, anti-credit union campaign called “Wake Up.” The campaign’s name appears to be a takeoff of CUNA’s campaign, “Open Your Eyes to a Credit Union.”
The nation’s bankers have opposed the tax-exempt status of credit unions for many years. However, the ICBA campaign takes specific aim at credit unions purchasing community banks.
In her letter, Romero Rainey notes that the GAO recently released a study questioning whether the FDIC had been “captured” by the banking industry and whether the agency was doing an effective job. She asked the senators to request that the GAO conduct a similar study on the National Credit Union Administration.
The GAO has said that it is examining the regulatory capture issue at all financial regulators but has not released a timetable for release of the NCUA report.
In her letter, Romero Rainey said that the NCUA has not yet implemented recommendations that the GAO made in 2003 and 2006.
Members of Congress have expressed little desire to become entangled in the bank-credit union battle. Former Senate Finance Chairman Orrin Hatch (R-Utah) questioned the credit union tax exemption—but only after he had announced that he intended to retire.