Thursday, June 16, 2011

ABA Testified to Senate in Opposition of CU Business Lending Bill

ABA Chairman Stephen Wilson testified this morning before the Senate Banking Committee at a hearing on credit unions’ member business lending limits.

Wilson told the Committee that ABA-opposed legislation (S. 509) to more than double certain credit unions’ member business lending limits would “allow a credit union to look and act just like a bank, without the obligation to pay taxes or have bank-like regulatory requirements applied to them.”

Wilson explained that credit unions’ claims that the legislation would enable them to meet the needs of small businesses seeking credit are “simply untrue,” as current law already allows credit unions to make all the business loans they want under $50,000.

“The minority who are at or near this cap are a new breed of institution that bears little resemblance to traditional credit unions,” Wilson said.

“These ‘morphed’ credit unions, which seek out large commercial customers, are a far cry from traditional credit unions, which have remained true to their credit union mandate to serve people of small means.”

See the full testimony.


  1. How about credit unions go back to their 1930s-era status if banks go back to the same era? No interstate banking. No international banking. No international loans. Only providing services to the communities around that bank.

    This is the 2010s. Electronic banking is the norm. Consumers expect easy-to-get and affordable financial services. Let's get real. Banks have changed in the last 80 years. Credit unions have changed in the last 80 years.

    Banks have received many government benefits that were not available to credit unions (such as TARP). Credit unions have received many government benefits that were not available to banks (corporate tax-exemption). Not to mention restrictions on credit unions that do not apply to banks (such as the 18% loan interest rate cap). (I don't think bankers want such usury ceilings anymore.)

    There are differences between the BofAs, Citis, Chases and Wells Fargos of the banking world and their smaller community banks. Yet, everybody agrees that they are banks.

    There are differences between the Navys, Pentagons, State Employees and BECUs of the credit union world and smaller credit unions. Yet, most everybody agrees that they are credit unions when they operate under the same charters, laws, regulations and rules.

    We need to stop this stupid game or we will all be out of jobs if Congress and the federal regulatory agencies (including the CFPB) run over all of us. Do we need more laws restricting our revenues like the CARD Act, debit card interchange and the upcoming anti-bank/CU regulator posed as Professor Warren? Together we can win. Fighting each other we will lose to the common enemy.

  2. Anonymous--
    you make some good points but miss a big point. "most everybody" that agrees the big cu's are still cu's is "most everybody at trade associations" and THATS IT. Most large cu's dont try to argue it anymore.
    the only ones trying to preserve the cu "movement" are cuna and the leagues who have everything to lose and act like it by advocating for mbl's when almost no one cares while they have not advocated for more transparency on the losses in corporates and the lack of action in shutting down failing retail cu's. and you havent advocated for more transparency because the truth would lead to many healthy cu's questioning the charter. so, out of self interest, you have failed your constituency.
    "Together we can win". Very good point. Together would mean combining most banks and cu's into one regulator and merging all the trade associations into one trade association. Short of that, lawmakers will continue to do what they do best, divide, conquer, and spend all those campaign contributions.
    Its not a "stupid game". its THE GAME.
    And its out of control in all walks of government.
    For cu's its worse than it is for their bank sisters. Your trade association works for the regulator instead of you and does not have your interest in mind. If they did, they would have been treating the last few years very differently by pounding the drum for more transparency instead of sugar coating what the assessments WILL be.



The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.