Independent Banker - June 2021 - 33

ICBA is calling for Congress to hold
hearings on this trend and to request a
U.S. Government Accountability Offi ce
study on the evolution of the credit
union industry-whose tax subsidy
costs the U.S. $2.5 billion a year in tax
revenue-and National Credit Union
Administration (NCUA) supervision.
For years, ICBA has sounded the
alarm bell about credit unions
exploiting their tax exemption to
Why hearings are needed now
These hearings is necessary because:
 Credit union complaints
are skyrocketing. Consumer
complaints to the NCUA rose more
than 1,500% in just fi ve years, from
3,480 in 2013 to 53,337 in 2018.
In addition, the 2020 American
Consumer Satisfaction Survey saw
credit unions fall to a historic low
score of 77 out of 100, 10 points
lower than their score in 2011 and
the second year in a row they were
rated lower than banks. The banking
industry overall scored a 78 in 2020.
Community banks and regional
banks scored an 81.
 Credit union member fees are
rising. Credit unions are diverting
their tax subsidies to acquisitions,
growth and nontraditional products
and services, and consumers are
paying the price in the form of
higher fees. A recent study found
that credit union service fee income
surged in recent years and now
stands at 132% of its 2008 level.
Compare this with bank service fee
income, which has dropped to 84%
of its 2008 level.
 Credit union oversight is lacking,
including fair lending regulation
and exams. Banks are subject to
the Community Reinvestment Act
(CRA), which requires each bank
to help meet the credit needs of all
the communities it does business
in, including low- and moderateincome
neighborhoods. Credit
unions are not subject to this rule.
Also, between 2013 and 2018, the
fund rapid growth and nontraditional
product offerings.
number of fair lending exams
and supervisory contacts of credit
unions decreased from 70 to 66. By
contrast, every bank is examined
for fair lending on a regular basis
without exception on a 12-month
or 18-month cycle, and every year
the agencies conduct thousands of
exams. Every time a credit union
buys a bank, it reduces the portion
of the fi nancial services industry
subject to CRA and fair lending
oversight. This hurts regulatory
agencies' abilities to promote
fi nancial inclusion and fair lending
and to reduce economic disparity.
 Credit unions are growing
larger. The current credit union
regulatory regime was intended to
oversee " a large number of small
credit unions serving a limited
fi eld of membership with only
a few basic fi nancial products, "
according to remarks made by
NCUA chairman Todd Harper in
2019. Today, fi eld of membership
rules are practically nonexistent,
limits against commercial lending
have dramatically weakened and
credit unions have grown in leaps
and bounds. There are now more
than 364 credit unions with assets of
more than $1 billion, and 14 credit
unions with assets of more than
$10 billion, the largest of which has
more than $131.6 billion in assets.
Yet, they still face the same loose
regulation as they did when they
were small cooperatives focused on
a specifi c customer segment.
How you can take action on
credit unions
Credit union competition was a major
focus of the ICBA Capital Summit in
April, with community banks using
ICBA talking points to make the case
to members of Congress and their
staff for holding hearings on credit
union acquisitions of taxpaying
community banks. ICBA sent letters
to the Senate and House banking and
fi nancial services committees and
tax-writing committees, but there's
more work to do.
Community bankers can reach out
to their members of Congress with
ICBA's Be Heard grassroots action
center (icba.org/beheard) as well as
make phone calls or set up virtual or
in-person visits. Credit unions are
known for their ability to generate
grassroots support. Community
bankers need to do the same to build
on our eff orts. 
Aaron Stetter (aaron.stetter@
icba.org) is ICBA's executive
vice president, policy and
political operations
independentbanker.org Q 33
http://www.icba.org/beheard http://www.independentbanker.org
Independent Banker - June 2021

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