ICBA Urges Small Credit Unions to Declare War Against Large Credit Unions

The vice chairman of the Independent Community Bankers of America is urging small credit unions to declare war on large credit unions.

In a recent post on the online publishing platform Medium, Brad Bolton accuses the National Credit Union Administration of adopting rules that favor large credit unions over smaller institutions, including community banks. And he is encouraging the small institutions to revolt against such decisions and join community bankers in demanding congressional investigations into the NCUA’s decisions.

Credit union executives might not be in the habit of listening to community bankers, but we have a long history of standing up to too-big-to-fail institutions — and the facts speak for themselves,” he wrote. Bolton is president and CEO of Community Spirit Bank in Red Bay, Ala.

Community bankers have been attacking the credit union industry for years, contending that they have an unfair advantage over banks because of the credit union tax-exempt status. But attempting to recruit small credit unions to join the opposition may be a new strategy.

Bolton said the ICBA is incensed over the NCUA’s recent decision to count military personnel in the low-income designation, a move that he said allows large credit unions to become immense.

In changing the rule governing low-income credit unions, the NCUA said that most military personnel would qualify as low-income and therefore, servicemembers should be counted when the agency determines whether a credit union qualifies as low income.

“The latest action by the National Credit Union Administration demands congressional oversight, and those demands should be made by credit unions themselves,” he wrote. Bolton accused the NCUA of acting on behalf of a select handful of nationwide credit unions “obsessed” with increasing their assets.

He said that the move also allows the largest credit unions to raise funds from outside investors and accept non-member deposits, unlike institutions that do not carry the low-income designation.

Bolton takes a shot at credit union trade groups, although he does not name any. “This gift to the riskiest entities the NCUA is charged with regulating is one piece of a broadly expansionist agenda driven by trade associations that claim to represent the entire credit union industry,” he wrote.

Bolton said that that small credit unions and others must demand that lawmakers “check this runaway regulator’s expansionist agenda.”


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