NCUA at the Crossroads

Drew Johnson, senior fellow at the National Center for Public Policy Research, recently wrote that decisions by the National Credit Union Administration (NCUA) have favored large credit unions at the expense of "a wilting number of small neighborhood credit unions committed to serving less-affluent Americans in underserved areas."

Johnson cited examples of how these large credit unions are straying from the mission of credit unions.

For example, he mentioned these large credit unions are buying commercial banks and the naming rights to arenas.

In addition, Johnson pointed out NCUA's proposal to give large complex credit unions subject to the agency's risk-based capital requirement the authority to raise capital from Wall Street investors. He argued this proposal will fuel the rapid growth of the largest credit unions and does nothing for small credit unions.

He also noted this proposal will change how these large credit unions operate. Johnson wrote: "Even if investors aren’t given board seats or a formal role in the management of the institution, a credit union’s CEO would be much more likely to listen to the concerns of hedge fund manager than those of a member with a personal checking account."

By kowtowing to the interest of the biggest credit unions, NCUA has fueled the consolidation of the credit union industry and reduced consumer choice.

Johnson stated the agency is at the crossroad. He called on NCUA to stop its questionable decisions, which favor these large credit unions.

The opinion piece appeared on Newsmax.com.

Read the op-ed.