Community Banker Alert

There continue to be positive developments in Washington, D.C. with regard to our multifaceted strategy of educating members of Congress on the unfair playing field that exists between community banks and the mega, bank-like credit unions.

PACB has learned that the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, chaired by Congressman Spencer Bachus (R-Alabama), a good friend to community banks, will be holding a hearing on May 11th on H.R. 3206, legislation that ACB developed, and ICBA is supporting, that would rein in the NCUA and the various bureaucratic obstacles that NCUA has placed before community credit unions that wish to convert to mutual savings institutions. PACB was part of a legal action against the NCUA in a Texas case in which NCUA was attempting to block a $1 billion credit union from converting because of how a disclosure to members was “folded”. We believe that as a result of the legal action and the introduction of H.R. 3206, the NCUA backed off and the credit union was permitted to move forward with its conversion process.

In addition to H.R. 3206, PACB has been strongly advocating for H.R. 2061, the Communities First Act, legislation that PACB and ICBA developed to provide tax credits to qualified community banks along with deep regulatory relief. This positive legislation has attracted over 80 cosponsors and has helped move the discussion to how Congress can help community banks as they struggle with unfair competition from the credit unions and onerous regulatory provisions.

Finally, we reported to you last fall that the House Ways and Means Committee held a hearing in November that focused on the tax-exempt status of credit unions. Both of our national trade associations did a terrific job in putting on the public record the arguments we all know to be true with regard to the inequities in the marketplace and how credit unions have strayed from their original purposes. We have also reported to you that the Government Accounting Office (GAO), a watchdog agency of the Congress, has been investigating NCUA and its regulatory and enforcement practices. The strong sentiment within our industry and our friends in Congress is that NCUA is nothing but a cheerleader for the credit union industry rather than a serious and unbiased regulator.

We will continue to keep you posted on significant developments with regard to the credit union fight. If you have any questions, please do not hesitate to contact me or Dave Transue.

Cc: ACB
      ICBA