WASHINGTON–The House Subcommittee on Consumer Protection and Financial Institutions will hold a hearing today on the banking system at which two pieces of legislation of interest to credit unions will be considered and at which two banking industry execs will testify. Credit unions will not be represented.
In advance of the hearing, NAFCU issued a statement calling on the banking industry to “tell the truth on why their industry is consolidating.”
The hearing comes as one banking industry group has been running ads in markets that are home to members of the committee attacking the credit union tax exemption.
Those ads claim credit unions have “lost their way.”
The hearing, titled Future of Banking: How Consolidation, Nonbank Competition, and Technology are Reshaping the Banking System, will include consideration of legislation that includes:
- H.R. 2311, the “Credit Union Governance Modernization Act of 2021.”
- H.R. 4395, the “Payment Choice Act of 2021.”
- H.R. 4590, the “Promoting New and Diverse Depository Institutions Act.”
- H.R. ____, the “Bank Merger Review Modernization Act of 2021.”
- H.R. ____, the “Close the ILC Loophole Act.”
- H.R. ____, the “Financial Services Worker Bill of Rights Act.”
- H.R. ____, the “NCUA Oversight of Third Party Vendors Act.”
The Witnesses
Among those scheduled to testify before the hearing are:
- Paulina Gonzalez-Brito, executive director, California Reinvestment Coalition
- Makada Henry-Nickie, Robert and Virginia Hartley Fellow - Governance Studies, Brookings Institute
- Sarah Jane Hughes, University Scholar and Fellow in Commercial Law, Indiana University School of Law
- Desiree Jackson, assistant vice president for treasury management, Beneficial State Bank
- Jim Reuter, CEO, FirstBank, testifying on behalf of American Bankers Association
NAFCU Issues Statement
Ahead of the hearing, NAFCU President and CEO Dan Berger said, “It is ironic that ABA is claiming the credit union tax exemption is a ‘new factor’ in banks looking to merge with credit unions. Mergers between banks have been occurring at a significantly higher rate with 5,000 mergers between banks occurring since 2003. Just yesterday, the Wall Street Journal examined bank merger data and found that bank to bank mergers were on track to hit the highest level since the financial crisis. ABA should tell policymakers the truth on why their industry is consolidating.
“During the hearing, we call on policymakers to look past the rhetoric by the banks and instead focus on how the banking industry can be safer for consumers,” Berger continued. “In their efforts to make profits, banks have ignored consumer protection laws resulting in $243 billion in fines since the financial crisis. Policymakers should consider creating a modernized Glass-Steagall Act in order to protect consumers and taxpayers from banks that are ‘too big to fail.’”