CUNA President/CEO Jim Nussle and Deputy Chief Advocacy Officer for Policy Analysis Mike Schenk addressed the state of credit unions and opportunities for the future Thursday at the Competitive Enterprise Institute. Nussle and Scheck discussed the need for regulatory relief, credit union history, the Community Reinvestment Act and other topics.
Nussle, speaking about regulatory relief, said credit unions aren’t fighting against the concept of regulation, he noted that “regulation is part of our value proposition.” He added that common-sense regulatory solutions will benefit credit unions, members, and American consumers as a whole.
“Our challenge is not that we’re regulated. Our challenge is that sometimes regulation comes in a one-size-fits-all package,” he said. “We’ve got credit unions with $1 million in assets being run out of church basements. How can you possibly have a regulation that fits Bank of America and that credit union? That doesn’t make sense. So we want regulation that’s common-sense, fits the situation and empowers individuals.
“I’m proud of what credit unions do to empower individuals and solve problems in their local communities, and that’s why I think credit unions have the kind of reputation they do,” he added.
Schenk pointed out numerous statistics to show how credit unions continue to serve their communities, including maintaining lending while banks pulled back during the financial crisis. Since the crisis, Schenk noted, bank lending to businesses is down 6%, while credit union business lending is up by 250% over the same time period.
“It’s the behavioral differences the credit union model produces that shows how valuable we are in the financial services marketplace,” he said.
The two were asked about Sen. Elizabeth Warren’s (D-Mass.) bill that would place credit unions under the Community Reinvestment Act (CRA), which Schenk said would be “hugely problematic” for credit unions.
“The numbers show that, when it comes to something like mortgage originations, credit union performance metrics are essentially identical to banks, and that's, and that’s without being under the CRA regulation and with the significant field-of-membership restrictions credit unions face,” he said. “That would be not only burdensome, but wholly unnecessary, since that type of lending is already being done.”
Other topics of discussion included interchange fees, the success of the Economic Growth, Regulatory Relief and Consumer Protection Act and the importance of data security legislation.