New polling data from the Independent Community Bankers of America (ICBA) probed Americans for their views on credit unions.
The poll, conducted with Morning Consult, found that 69 percent of those surveyed said that credit union customers should have the same consumer protections that banks provide.
Further, 75 percent of those surveyed said that credit union customers should have the same levels of protection against illegal discrimination as bank customers.
In addition, 62 percent said Congress should investigate whether credit unions should continue to be exempt from certain regulations designed to protect fair lending.
“While credit unions continue to violate the limits established by Congress to justify their tax and regulatory exemptions, our latest polling shows the Americans who subsidize the credit union industry are increasingly skeptical of the industry’s lagging consumer protections,” ICBA President and CEO Rebeca Romero Rainey said. “As credit unions increasingly use their taxpayer subsidies to finance acquisitions of tax-paying community banks, Congress should investigate the impact of credit union regulatory exemptions on consumers and local communities.”
ICBA also sent a letter to the National Credit Union Administration calling on the agency to bar credit unions from using funds raised from Wall Street investors to finance acquisitions of community banks.
“The credit union tax exemption should not be for sale to the highest bidder on Wall Street,” ICBA President and CEO Rebeca Romero Rainey said. “The trend of growth-focused credit unions exploiting their federal tax exemption to raise funds from for-profit investors further entrenches the industry’s tax and regulatory exemptions while increasing credit unions’ debt burden, to the detriment of their member-owners.”
In the letter to the NCUA, ICBA said the agency should curb the abuse of its subordinated debt rule, which allows credit unions to use their tax exemption to raise money from private equity firms to acquire community banks.
Specifically, ICBA called on the NCUA to prohibit any credit union that issues subordinated debt from participating in a merger or acquisition for the next five years. It also suggested that credit unions should be prohibited from issuing subordinated debt for five years after completing the acquisition of a community bank.