Lack of Accountability

Given the services they provide and their structure, credit unions should presumably adhere to stringent regulatory requirements like banks do and public disclosure requirements like nonprofits do but neither is the case. These substantial regulatory and disclosure gaps shield the credit union industry from proper scrutiny, which is a disservice to all Americans. This is especially problematic for those who support traditional, mission-driven credit unions facing competitive pressures from modern ones pursuing profits. 

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Expert Views

Josh Silver, National Community Reinvestment Coalition
The Community Reinvestment Act should be expanded to cover credit unions, other nonbank lenders and insurers, according to the National Community Reinvestment Coalition. Noting the growing share of nonbanks and credit unions in mortgage lending, NCRC Senior Policy Adviser Josh Silver argued that if nonbanks remain outside of CRA, “the competitive position of banks eventually will be undermined to the detriment of access to safe and sound credit and capital for LMI communities.” 
— National Community Reinvestment Coalition, 2020
Todd Harper, Then-NCUA Board Member and Current NCUA Chairman
“Why should it take complex, federally insured credit unions with $500 million or more in assets seven or eight years longer to implement their comparable risk-based capital rule than it took for banks and thrifts to implement theirs? That’s an uneven regulatory playing field.” 
— National Credit Union Administration, 2019
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Recent News and Insights

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Crane Credit Union, of Crane, Ind., is buying its second bank of the year, saying it would purchase Spencer, Ind.-based Our Community Bank from Home Financial Bancorp in an all-cash transaction.

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It’s odd that the credit union industry is using the ongoing global pandemic to make a desperate push for expanded business lending authority and broader “common bonds.” When Congress gave credit unions the tools weeks ago to make forgivable loans to struggling small businesses through the PPP, they weren’t interested.

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Credit unions spend a lot of time and millions of marketing dollars touting their commitment to their members and to the greater cooperative good. “For people, not profit” is so ubiquitous a saying among the promoters that it is nearly as over-used as giant credit union PenFed’s “great rates for everyone” commercial jingle.

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Teachers Credit Union, a South Bend, Ind.-based large credit union, completed its acquisition of New Buffalo Savings Bank, a community financial institution with $111 million in assets and locations in New Buffalo, Sawyer and Three Oaks, Michigan, further expanding the credit union’s presence in Southwest Mi. – Harbor Country News, June 2020

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2019 wrapped up in record fashion for the nation’s largest credit unions. And unfortunately for American consumers and taxpayers, what’s good for these so-called “not-for-profits” isn’t good for the people that pay the bills.

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United States District Court Judge Joseph H. McKinley, Jr. has sentenced Josephine M. Crowe to 132 months’ imprisonment followed by 3 years supervised release. He also ordered restitution in the amount of $3,049,025 for fraud and aggravated identity theft, announced United States Attorney Russell Coleman. – U.S. Department of Justice, November 2019

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Credit unions were created in the 1930s with a noble purpose in mind: Pool the resources of people who shared a common bond to help relieve the financial struggles of people of modest means within their community of shared interests.

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