Removing Barriers Blog

CUNA responds to FDIC Chair after disappointing comments at HFSC
Posted December 05, 2019 by CUNA Advocacy

At yesterday’s hearing in House Financial Services Committee with the prudential regulators, Chair McWilliams of the Federal Deposit Insurance Corporation (FDIC) expressed worry over the impacts of credit unions purchasing banks. In response, CUNA wrote to Chair McWilliams about how her comments were misinformed, inaccurate and, frankly, something credit unions would expect to hear from a banking lobbyist, not a banking regulator.

In the letter, CUNA wrote “While still extraordinarily rare relative to the number of bank mergers, credit union-bank transactions take place because they are good business decisions for the parties involved, as well as the consumers, small businesses and communities involved. Consumers benefit by gaining access to strong, responsible community-focused financial services. Communities benefit because credit unions provide more than $4 billion in indirect consumer benefits, especially in underserved areas that often have no other affordable option for financial services.  And, clearly, bank investors benefit, or why would the bank sell in the first place?”

The letter added that there have been more than 30 of these transactions since 2012, and more than 80% have been conducted by credit unions that have a specific focus on low-income families.

In response to McWilliams’ concerns over credit unions and the Community Reinvestment Act (CRA).

“There is a reason credit unions were excluded when Congress enacted the law in 1977. Simply put:  banks were redlining and credit unions weren’t. This law was enacted to encourage banks to meet the needs of consumers in their communities that had been intentionally ignored and to reduce discriminatory lending practices, or “redlining,” the ramifications of which still plague our country today.”

Since their inception over 100 years ago, credit unions have continually offered full and fair service to their members, including those at low- and moderate-income levels.