Community Banks, Credit Unions Sound Similar Themes, But Not for Long


CU and banking groups briefly align as they seek to distance themselves from recent major bank failures.

Under normal circumstances, when a financial services crisis develops, banks and credit unions spend their time attacking each other.

As the past few weeks have demonstrated, these are not normal times.

The failure of two large banks and the possibility that only large deposits at systemically risky banks will be insured have resulted in fissures in the banking industry with community bankers attacking the large banks.

And of course, credit unions continue to criticize all the banks.

What community bankers are saying

When Silicon Valley and Signature banks failed, the Independent Community Bankers of America quickly differentiated themselves from large financial institutions.

In doing so, the community bankers sounded very much like credit union officials who always stress “the credit union difference.”

“In stark contrast to the nation’s largest banks, community banks operate under an entirely different business model—one that’s based locally and is relationship focused,” ICBA President/CEO Rebeca Romero Rainey said last week. “As small businesses themselves, local community banks take pride in serving the unique needs of their customers and communities. In short, they are in it for the long haul to serve the needs of those who count on them for financial stability and prosperity.”

She added that the organization will oppose making community banks responsible for any potential losses to the deposit insurance fund.

What credit union groups are saying

Rainey just as easily could have been talking about credit unions.

Here’s what CUNA officials recently said.

“As not-for-profit financial cooperatives, credit unions’ first priority is the people we serve,” the organization stated. “Recent bank failures have no connection to credit unions but do emphasize how the credit union difference makes a clear difference for consumers.”

Differences remain, naturally

This is not to say that community bankers and credit unions now are totally united in their public policy positions.

Take the subordinated debt rule approved by the NCUA board at last week’s meeting.

“We thank the NCUA board for making a necessary change to enable low-income credit unions participating in Treasury’s Emergency Capital Investment Program to receive the program’s maximum benefit,” Alexander Monterrubio, CUNA’s deputy chief advocacy officer for regulatory affairs, said, following the decision.

And when the rule originally was proposed, NAFCU officials made similar comments.

But not the community bankers, who immediately noted their opposition to the move.

“Allowing credit unions to issue subordinated debt with maturities longer than 20 years blurs the line between debt and equity financing and allows credit unions to engage in an aggressive expansion that is not related to serving their members of modest means,” the ICBA said at the time.


  • David Baumann

    David Baumann established and edited the Washington Credit Union Daily website before it was put on hiatus while he served as the editor of the regulatory and legislative blog at CUCollaborate. Before starting Washington Credit Union Daily, David was the Washington correspondent for the Credit Union Times. A veteran Washington reporter, he has spent his career writing and editing for many of the capital’s leading publications, including CongressDaily, National Journal magazine and Congressional Quarterly Weekly. He was part of a team that won a 2005 National Headliner Award for a special issue of National Journal on “The State of Congress.” He holds a B.A. in political science from The George Washington University and an M.A. in journalism from Indiana University.

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