ICBA advocates continued National Credit Union Administration for-profit regulation

The Independent Community Bankers of America (ICBA) is encouraging the National Credit Union Administration (NCUA) to refrain from advancing a proposal deregulating for-profit entities.

© Shutterstock

The ICBA maintains the proposal would enable for-profit companies owned by tax-exempt credit unions to make any type of loan permitted for federal credit unions. However, the companies are not supervised by the NCUA and exempt from Federal Credit Union Act consumer protections.

“While community banks have led the pandemic response in local communities, the National Credit Union Administration is once again showing that federal laws and regulations governing the credit union industry are fundamentally flawed,” ICBA President and CEO Rebeca Romero Rainey said today. “Instead of expanding the lending powers of privately owned companies it is not authorized to regulate, the NCUA should focus on promoting consumer protections and a safe and sound financial sector.”

The ICBA has cited while credit unions own credit union service organizations (CUSOs), they do not follow the institutions’ business model. They are not mutually owned, member owned, required to serve credit union members, overseen by credit union laws and regulations, or required to follow the credit union industry’s prudential safeguards.

In correspondence to the NCUA, the ICBA supported withdrawing the proposal to avoid additional eroding of the credit union industry’s tax-exempt mission, in addition to expanding risks to consumers, the fund insuring credit union member shares and credit unions.