Wednesday, January 31, 2018

Senator Hatch Writes NCUA over CUs Operating Beyond Tax-Exempt Purpose

Senate Finance Chairman Orrin Hatch (R-Utah) wrote the National Credit Union Administration (NCUA) expressing concerns that credit unions may be operating beyond their tax-exempt purpose.

"I am concerned that the credit union industry is evolving in ways that take many credit unions further from their original tax-exempt purpose," Hatch wrote in a letter to NCUA Chairman Mark McWatters.

Senator Hatch noted that the agency has watered down field of membership requirements, opened the door to secondary capital, and lifted limits on activities that are not traditionally aligned with the credit union's tax-exempt purpose.

Senator Hatch wrote that many larger "credit unions appear to operate in the same manner as taxable banks."

He also expressed reservations about tax-exempt credit unions acquiring for-profit banks.

The letter further pointed out that NCUA has not implemented 2006 recommendations by the Government Accountability Office to require federal credit unions to publicly disclose executive compensation information.

Senator Hatch requested the agency to reply by April 6 to seven questions. Topics to be addressed include field of membership, executive compensation, corporate sponsorships, and services outside of the credit union tax-exempt purpose.

Read the three-page letter below (click on images to enlarge).

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