Read more at the Washington Credit Union Daily
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.
Jim Reuter, CEO of FirstBank in Colorado will testify on behalf of American Bankers Association. Colorado is the home state of the subcommittee’s chairman, Rep. Ed Perlmutter.
The ABA has called on Congress to repeal the credit union income tax exemption and has urged Congress to investigate the purchases of banks by credit unions.
“It is time for Congress to engage and determine whether credit union acquisitions of banks and the negative consequences that follow these transactions meet the public policy goals Congress intended when it created tax-exempt credit unions in the first place,” ABA President/CEO Rob Nichols wrote in a letter to House and Senate committees that oversee financial regulators.
A memo released by the Democratic staff of the House Financial Services Committee outlined the issues the hearing will explore.
“The hearing will examine these evolving trends and their impact on consumers, small businesses, communities of color, bank employees, and other industry participants, and evaluate policy options to ensure there are robust safeguards in the public’s interest that improve competitiveness, promote innovation, and provide broad access to affordable financial products and services,” the Democratic staff said.
In a letter to leaders of the House Financial Services Committee last week, Rebeca Romero Rainey, president/CEO of the Independent Community Bankers of America requested that the issue of credit unions purchasing banks be discussed at the meeting.
While there will not be a credit union witness testifying, two credit union-related bills are listed as among those pieces of legislation that may be discussed at the session.
H.R. 2311, legislation introduced by Rep. Tom Emmer, R-Minn., and cosponsored by Perlmutter, would make it easier for a credit union to expel a member who “engages in egregious, dangerous or illegal conduct.” Current law requires a credit union to hold a membership vote before a member may be expelled. The legislation would allow credit unions to expel members who engage in such conduct.
The second bill, which has not yet been introduced, would give the National Credit Union Administration supervisory powers over third-party vendors. NCUA board members, the Government Accountability Office and the NCUA’s inspector general have recommended that Congress grant the agency such powers. Credit union trade groups have opposed it.