The Independent Community Bankers of America has launched three grassroots campaigns in its battle against credit unions.
First, the ICBA is asking community bankers to join its call for congressional hearings to probe the trend of credit unions purchasing banks. “Credit unions’ tax avoidance schemes already cost Americans billions of dollars each year, and now they are abusing their mandate to snap up taxpaying community banks at an alarming rate,” the ICBA said, in urging bankers to contact their members of Congress. The trade group noted that Congress has oversight authority “over this troubling distortion,” adding that Congress should hold a hearing “on the causes and impact of this dangerous trend and explore potential solutions.”
National Credit Union Administration Chairman Rodney Hood has defended the purchases, saying that they signify the free enterprise system is at work.
The ICBA also is urging its members to file comments with the NCUA on a proposed rule governing bank purchases by credit unions and urges members to “share your story on tax-exempt credit unions’ obsession with acquiring community banks, rather than focusing on the consumers and members that they’re supposed to serve.” In January, the NCUA issued a proposed rule that the agency said clarifies how such purchases may take place. Comments on that rule are due June 15.
Finally, the ICBA is urging bankers to comment on the NCUA’s proposed rule governing subordinated debt. “This action to permit increased leverage for financial institutions that were originally chartered to serve consumers of limited means or of a common bond puts in real jeopardy the safety and soundness of the credit union system and American taxpayers who provide a backstop for such high-risk financial instruments,” the trade group said. That rule also was issued in January; comments on it are due July 8.