Risks borne by recently collapsed banks should not be paid for by credit unions that serve communities across our country, CUNA wrote to the House Financial Services Committee for its hearing on recent bank collapses.
“While much remains to be discovered regarding the causes of the collapse of SVB—and we hope this hearing today uncovers more information—we can be clear on this: our community-focused credit unions did not cause the collapse of one of the largest regional banks in the country, and should not face more federal regulation or increased fees due to these banks’ actions,” the letter reads.
CUNA notes that more than 91% of credit union deposits insured, and credit unions remain stable, safe and secure.
“The credit union difference makes us stronger by helping improve the financial well-being of Americans nationwide. Credit unions are member-owned, not-for-profit financial cooperatives that put our members ahead of the bottom line,” it adds.
CUNA encouraged the committee to consider legislation to help credit unions with under $250 million in assets access liquidity more easily, similar to CUNA and League-led legislation to extend COVID-related flexibility to access NCUA’s Central Liquidity Facility.
The letter also highlights issues privately insured credit unions have had accessing the Federal Reserve’s Bank Term Funding Program, which the Fed has limited to federally insured credit unions.
“Privately insured credit unions are state‐chartered, state‐regulated and subject to the same regulatory requirements as are state‐chartered, federally insured credit unions in their respective states. In all aspects, privately insured credit unions are regulated like all other state‐chartered credit unions, except they are not federally insured,” the letter reads. “CUNA strongly encourages the Federal Reserve to allow all credit unions, regardless of the source of their deposit insurance, to access the BTFP and asks that the committee bring up this important issue with Vice Chair Barr in the hearing today.”
CUNA wrote a similar letter to the Senate Banking, Housing, and Urban Affairs Committee for its hearing on the collapses.