On Wednesday, several members of Congress had questions for the chairs of the NCUA and the FDIC during testimony before the U.S. House of Representatives. Much of the discussion during the regular appearance by financial institution regulators revolved around credit union purchases of banks. The hearing took place just one day after the largest such deal to date was announced.
NCUA Chairman Rodney Hood (Photo credit: CUtoday.info) and FDIC Chair Jelena McWilliams appeared before the House Financial Services Committee during a regularly scheduled hearing for financial institution regulatory agencies. Following their
prepared remarks, during questions by members of the committee, Rep.
Blaine Leutkemeyer (R-MO) asked both Hood and McWilliams about their
“concerns” over credit unions buying banks.
“These are voluntary, market-based transactions,” responded Hood.
“There have been 28 acquisitions to date and others are pending,”
answered McWilliams. “Yes, we have concerns and are looking at this…”
Rep. Trey Hollingsworth (R-IN) said he has had discussions with both
Hood and his constituents related to CU acquisitions of banks and has
heard both positive and negative views on the issue. Hollingsworth
pressed Hood for his view on the issue.
“There have been 32 credit unions that have acquired bank
assets since 2013. There have been 250 bank on bank acquisitions over
the last year alone,” said Hood. “These are voluntary, market-based
transactions. In approving these transactions we at NCUA look to ensure
that the bank’s customers qualify for the FOM, and that other statutes
of FCU Act are met. And I would note that if not for credit unions
acquiring some of these banks, some communities would be left without a
financial institution. At the end of the day, the bank does get to
choose who that acquiring institution is. It’s not arbitrary or
capricious.”
In response to legislator questions regarding the credit union income tax exemption, Hood said, “...in today’s dynamic marketplace, at the end of the day {consumers} are
getting access to affordable financial services. I would much rather
have both banks and CUs growing…I don’t want to pit banks against credit
unions. Credit unions now serve a third of the American public and I
think that is due to their commitment to providing access.”
When asked about whether credit unions should be subjected to the Community Reinvestment Act, Hood replied, "Credit unions are based on a mission of people helping people. They are serving low-income people through their products and
services they already offer. I don’t think credit unions need
government fiat to encourage them to do the right thing.”
That's All Folks!
3 years ago
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