WASHINGTON (10/7/09)--Public demand and congressional action could force banks to adopt many of the conservative, pro-consumer business practices currently employed by credit unions, but credit unions will still be “driven by a different motive” than that of banks, Credit Union National Association President/CEO Dan Mica said during a Monday appearance on Bloomberg TV.
While banks will never be confused with credit unions, they may have to “pay more attention to what consumers want and not just what shareholders want,” Mica added. Mica also commented on the democratically owned-and-operated nature of credit unions, which is “clearly very different” from the way that the shareholder-beneficial banking industry is set up. More specifically, Mica highlighted the beneficial lending and mortgage rates that credit unions have always provided to their members, as well as the strong 10% capitalization ratios that are currently held by credit unions. Mica also touted recent increases in mortgages, which are up by 8% for credit unions, and member business lending, which he said has increased by 14%. “All in all, we are out there lending, and that is what this economy needs,” Mica added. While the exact format of the proposed Consumer Financial Protection Agency will likely change as it moves through the legislative process, Mica said that Congress “will almost certainly get something out,” as there is a strong will among some congressional leaders, Treasury Secretary Timothy Geithner, and President Barack Obama to create the new agency.