WASHINGTON--A banking industry trade group is expressing strong opposition to NCUA's newly approved rules on subordinated debt.
As CUToday.info reported here, the NCUA board has approved expanded authority for certain credit unions to issue subordinated debt and have it count toward their capital.
The Independent Community Bankers of America "and the nation's community banks strongly oppose today’s National Credit Union Administration approval of a final rule that will allow the largest and most complex tax-exempt credit unions to issue subordinated debt to institutional investors," said ICBA President and CEO Rebeca Romero Rainey. "This rule is yet another example of the NCUA pushing the envelope and expanding credit union powers well beyond limits justifying the industry’s tax exemption.
“The NCUA’s rule would undermine credit unions’ mutual ownership structure, allow outside investors to exploit the credit union tax subsidy, and fuel runaway growth of an industry that has abandoned its founding mission to serve people of modest means," Romero Rainey continued. "“Through its ‘Wake Up’ campaign and Credit Union Task Force, ICBA will continue calling on policymakers and the public to open their eyes to the risky practices, costly tax subsidies, and irresponsibly lax oversight of the nation’s credit unions."