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ABA: The American Bankers Association
Press Release

ABA Statement on Today's NCUA Board Meeting

WASHINGTON —

American Bankers Association President and CEO Rob Nichols issued the following statement on today's National Credit Union Administration proposals to allow large credit unions to issue subordinated debt to outside investors and formalize a process for tax-exempt credit unions to purchase banks.

"The NCUA's decision to double down on bad public policy is disappointing and should be concerning for taxpayers and those credit unions that are fulfilling their mission of serving people with 'modest means' that share a real 'common bond.' Allowing large credit unions to issue debt to outside, for-profit investors could misalign the incentives of credit union executives with their member owners, and potentially crowd out low-income credit unions' ability to raise secondary capital. Policymakers should be concerned that today's proposal doesn't require that the additional capital be used to serve the low- to moderate-income consumers that credit unions were created to help.

"While allowing large credit unions to issue outside capital is concerning enough, the NCUA also provided a roadmap for them to expand their federal tax subsidy by acquiring taxpaying community banks. Given that we have already seen a wave of these acquisitions over the last few years, now is not the time for the NCUA to create additional tools to encourage more of these deals.

"Members of Congress have already begun to raise serious concerns about large credit unions, and we encourage them to look very closely at these proposals and this rapidly changing industry."

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About the American Bankers Association

The American Bankers Association is the voice of the nation’s $21.1 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $17 trillion in deposits and extend nearly $11 trillion in loans.

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Ian McKendry

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