Washington Times Editorial: NCUA Captured by CUs

A recent Washington Times editorial highlights how the National Credit Union Administration (NCUA) is captured by the industry it regulates and puts that industry's interests ahead of the public interests.

According to the Washington Times,

"Regulators are always eager to hop in bed with the regulated. Both the regulators and the regulated make themselves mutually comfortable in the mutual assessment that they’re smarter than everybody else, and feel safer working in the dark.

One late example of how this happy scheme works is the attempt by the National Credit Union Administration to help the credit unions it regulates compete with banks in ways that Congress has consistently prohibited. Some of the things they do can make them look like banks, but credit unions are not banks. Credit unions are exempt, for one important example, from some of the taxes banks must pay."

The National Credit Union Administration now proposes to expand the ability of credit unions to make risky large loans by raising limits imposed by Congress to prevent abuse of their special status. The most aggressive credit unions want to compete with community banks, whose practices are not now within the purview of the regulators.

If this attempt succeeds, the credit unions will, like other captured regulatory agencies, be enabled to work not in the interests of the public, but to advance the interests of the credit unions with whom they share that comfortable bed."

Read the editorial.