WASHINGTON (6/17/15)--CUNA President/CEO Jim Nussle Tuesday warned lawmakers that a recent letter from bank groups attacking credit union legislation was riddled with inaccuracies and fallacies.
Nussle was addressing a June 11 letter to lawmakers from the American Bankers Association and the Independent Community Bankers of America. It opposed the provisions of the Credit Union Residential Loan Parity Act (H.R. 1422) and the inclusion of those provisions in the Financial Services and General Government Appropriations Act for FY 2016.
H.R. 1422 would give credit unions parity with banks in the classification of loans for one- to four-family, non-owner-occupied residential properties. The Federal Credit Union Act requires credit unions to classify these loans as commercial loans while bank statutes do not.
In the Tuesday letter to Reps. Harold Rogers (R-Ky. ) and Nita Lowey (D-N.Y. ), chair and ranking member of the House Appropriations Committee respectively, Nussle noted that National Credit Union Administration call report data shows the average size of such loans at credit unions is roughly $175,000. The NCUA also backs H.R. 1422 and agrees the treatment of these loans should more closely resemble residential loans than commercial loans.
"The credit union regulator and insurer have indicated this is the preferable treatment of these loans; we urge you to correct the statutory treatment of these loans to provide parity," the CUNA letter said. If reclassified, the one- to four-family loans would not count toward a credit union's member business lending cap, thereby providing increased access to more credit through credit unions.
Nussle also held up to the light the bankers' "willful ignorance of the credit union mission and history, as well as the purpose of the tax status." He criticized the banks for using a false understanding of credit unions, their mission and their not-for-profit tax status as a basis to try to block passage of H.R. 1422 "and other proposals aimed at ensuring small businesses have access to credit from credit unions."
"The bankers' end game is clear and their views should be disregarded because they are littered with inaccuracies and fallacies. At the end of the day," Nussle wrote, "Congress has the ability to ensure small businesses have access to credit from lenders capable of providing it; credit unions can help if you allow them to."