Countering banker falsehoods, update on DEI, NCUSIF among topics in letter to House lawmakers

May 18, 2021

CUNA wrote an extensive rebuttal to falsehoods spread by banking trade associations in a letter to the House Financial Services Committee on Tuesday. The letter, sent ahead of the Committee’s Wednesday hearing on oversight of prudential regulators, also gave an update on credit unions’ diversity, equity, and inclusion (DEI) journey, as well as input on the National Credit Union Share Insurance Fund (NCUSIF).

Banks selling to credit unions

While banking trade associations have launched national campaigns and lobbied Congress to cry foul over bank CEOs selling their assets to credit unions, Tuesday’s letter noted how rare these sales are.

“…[W]e don’t quite know what to make of the bank groups’ objection to these transactions given the relative size of this activity,” the letter reads. “ Since 2012, there have been 35 bank sales to credit unions (totaling $4.7 billion) compared to more than 2,000 bank to bank merger and acquisitions (totaling $1.7 trillion); market-based sales to credit unions represent roughly 0.3% of the total asset volume of all bank merger activity during this time period. To say they are making a mountain out of a molehill would be grossly exaggerating the size of a molehill.”

The letter also relayed how these transactions benefit consumers and communities, noting how they prevent the surge in banking deserts over the past two decades, with banks shuttering a net 6,000+ branches since 2004, while a net 1,600 credit union branches have opened in the same period. The letter also notes that 80% of these transactions involve low-income designated credit unions, meaning that a bank selling to a credit union means that not only is a branch likely to remain open, but the credit union is likely to have a particular focus on low-income individuals and families.

Credit union diversity, equity, and inclusion

In addition to setting the record straight on banks selling to credit unions, CUNA provided an update on credit unions’ DEI journey.

The letter shared with lawmakers CUNA’s recent issues brief on gender diversity in credit union leadership, noting that 51% of credit union CEOs are women, compared to just 3% of bank CEOs, and that 33% of credit union board members were women, versus only 16% at banks.  

The letter also highlighted CUNA research on branch location, noting that 75% of credit union branches are located in middle, moderate, and low-income communities (compared to 70% of banks) and that 76% of credit union branches are in racially and ethnically diverse areas (compared to 71% of banks).

The letter also noted that credit unions are committed to doing more to advance DEI and enhance the financial well-being of their employees, members, and communities.

National Credit Union Share Insurance Fund

Lastly, the letter shared CUNA’s thoughts on the NCUSIF, noting that requests by NCUA Chairman Harper to adjust NCUSIF premium thresholds are drastic, unnecessary, and inappropriate, as adjustments reduce the funds available for credit unions to serve their members.

“…NCUSIF is funded by credit union member deposits, so every dollar over-insuring the fund is a dollar that is not being used to the benefit of credit union members,” the letter reads.

Tuesday’s letter covered several other topics of interest to credit unions, including legislation that would expand financial access, modernizations to the Federal Credit Union Act, and PCA flexibility.