Fintechs—not credit unions—emerged as the main villain Wednesday at a House Financial Services Committee subcommittee hearing exploring consolidation in the financial services industry.
A hearing on consolidation in the financial services industry will feature the perspective of the American Bankers Association, which has warned about the impact of credit unions purchasing banks.
The Sept. 29 hearing of the House Financial Services Committee’s Consumer Protection and Financial Institutions Subcommittee, will not feature a representative of the credit union industry.
The Biden Administration’s plan to require banks and credit unions to report data to the IRS from accounts that have “gross flow thresholds” over $600 will not pose an additional regulatory burden on financial institutions, Natasha Sarin, the Treasury Department’s deputy assistant secretary for economic policy wrote Tuesday.
A proposal that would allow all credit unions to provide financial services to underserved areas simply is a power-grab by an industry hungry for expansion, the American Bankers Association charged Monday.
Credit union and banking trade groups are asking Congress to ignore proposals to impose a 36% fee and interest cap on loans made by financial institutions.
“The proposed 36% fee and interest cap would make it more difficult for many consumers to obtain credit, thereby harming the very consumers the legislation seeks to protect. Congress should reject these legislative measures,” the groups, including the Credit Union National Association, the National Association of Federally-Insured Credit Unions, the American Bankers Association and the Independent Community Bankers of America, wrote, in a letter to the Senate Banking Committee.
Credit union and banking political action committees have resumed making campaign contributions to House members who objected to the certification of some states’ Electoral College votes on Jan. 6.
If President Biden’s Executive Order on competition is any indication, banker arguments that credit unions pose an unfair competitive threat may not be gaining traction in the White House.
The House next week will consider a resolution that would rescind a Trump Administration rule by the Office of the Comptroller of the Currency that credit union trade groups contend allows predatory online lenders to “rent” a bank to evade consumer protection laws. “In order to rein in predatory lenders and ‘rent-a-bank’ schemes, S.J. Res. 15 would overturn a rule by the Office of the Comptroller of the Currency and allow states once again to regulate these lenders and protect consumers,” House Majority Leader Steny Hoyer (D-Md.) wrote in a letter to colleagues outlining the June House agenda. Republicans have
Credit union and banking trade groups are asking Acting Comptroller of the Currency Michael Hsu to withdraw a Trump Administration policy that allows the agency to issue charters to payment companies and crypto-currency firms.
The high-pitched fight over credit union purchases of banks received scant attention when the House Financial Services Committee pressed financial regulators Wednesday.