WASHINGTON (11/30/15)--CUNA Chief Advocacy Officer Ryan Donovan says a banker's threat to sue reinforces the need for credit unions to have a strong united voice in support of a proposal by the National Credit Union Administration to modernize rules that control who can join which credit unions.
"We anticipated the bankers would push back hard against this proposal, after all they did not even wait to see the proposal before indicating their opposition to it,” he says. “It reflects their strategy to oppose anything that might enhance access to credit unions, and it is as much anti-consumer and anti-small business as it is anti-credit union."
The National Credit Union Administration proposed a plan to update field-of-membership (FOM) rules on Nov. 19.
In a Nov. 24 American Banker article titled, "Field-of-Membership Clash Takes Nasty Turn with Legal Threat," Camden Fine, president/CEO of the Independent Community Bankers of America, said the NCUA's proposal has left bankers "apoplectic."
He added that if the NCUA doesn't "back off," there is a "good chance" his group will litigate, the article reported.
But, Donovan says that the banker litigation threat is premature and will prove baseless. "Frankly, I’m not sure how much thought the bankers could have given to litigation this early in the process, but it should remind everyone that the banking trade groups will stop at nothing to keep consumers from having broader access to credit unions."
CUNA is still analyzing the proposal, but believes, based on an initial read, that it not only squarely comports with the Federal Credit Union Act, but that the NCUA could go even further with its proposal and still be lawful.
“We asked NCUA to remove any limitations or restrictions in the rules that are not required by law. There is a lot of room for improvement between what is presently in regulation and what the law would permit.
"NCUA’s proposal heads in the direction of greater consumer access to credit unions, and I am sure that as we continue to analyze what they have proposed, we will identify areas where they could go even further to enhance choice for consumers, as well as flexibility for credit unions to better serve their communities, " Donovan says.
In addition to strong comment letters to the NCUA, Donovan urges credit unions also to contact their federal lawmakers in support of the rule changes.
"We have thanked the NCUA for drafting a rule that stays within the confines of the Federal Credit Union Act, while ensuring American consumers are allowed more options when choosing their financial services provider,” he notes.
"That is a message that should be shared broadly with lawmakers on Capitol Hill."