Lack of Accountability

As soon as next month, the National Credit Union Administration is expected to issue a new proposed rule on executive compensation transparency for federal credit unions.

The Houston-area Texas Dow Employees Credit Union (TDECU), a $4.7 billion financial institution that has spent tens of millions of dollars on stadium naming rights and doubled in size over the last decade, announced its intent to acquire a $1.2 billion Louisiana bank. The bank “specializes in commercial loans,” reflecting a broader trend in CU acquisition targets, and will expand TDECU’s geographic presence throughout Louisiana and Texas.

The credit union lobby’s latest rallying cry will surprise policymakers and bankers alike, as it advocates to “ensure all financial providers operate in a fair regulatory environment, under the same rules and with the same consumer protection requirements.”

Last month, the National Credit Union Administration (NCUA) Board of Directors unanimously approved the agency’s $385 million budget for 2024. As usual, this annual vote received little (if any) attention outside of credit union circles. But with recent headlines concerning lending practices at America’s largest credit union and subsequent calls from House Financial Services Committee Ranking Member Maxine Waters (D-CA) to investigate, the debate regarding NCUA’s ability to adequately assess consumer protection and fair lending violations at credit unions deserves closer scrutiny. 

Federal Reserve Governor Michelle Bowman called on federal policymakers to analyze the impact of credit unions and non-bank lenders in local markets before approving bank combinations, during the Conference of State Bank Supervisors’ Community Bank Research Conference on September 28.