CUs should not face additional regulation after bank collapses

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, CUNA wrote to the Senate Banking, Housing, and Urban Affairs Committee. The committee will conduct a hearing on recent bank collapses Tuesday.

“With more than 91% of credit union deposits insured, credit unions remain stable, safe and secure during this time of uncertainty in the banking sector,” the letter reads. “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.”

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.”