ALEXANDRIA, Va.–The huge Japanese conglomerate Rakuten filed for a federal credit union charter earlier this year, before withdrawing its application, CUToday.info has learned.
Japan-based Rakuten operates in more than 30 countries and has annual revenues of nearly $13 billion, owns stakes in numerous sports franchises, and has been described as the “Amazon of Japan.” It also owns a bank in its home country and offers other financial services through fintech.
NCUA has confirmed for CUToday.info that the company filed for a federal credit union charter on May 15 of this year, before withdrawing it on Sept. 5. The agency did not provide any additional details.
The withdrawal of the charter application came at nearly the same time the Independent Community Bankers of America (ICBA) said it was filing a Freedom of Information Act (FOIA) request with NCUA for more information on whether an application for a federal credit union charter and/or for deposit insurance coverage had been filed.
A Call For Making Information ‘Public’
“After repeatedly applying for an industrial loan company charter to limit its regulatory oversight, Rakuten is now reportedly seeking a charter with the National Credit Union Administration, which has continuously sought to expand the powers of the tax-exempt industry it is charged with regulating without adequately examining compliance with consumer protection directives,” ICBA President and CEO Rebeca Romero Rainey said in a statement made prior to CUToday.info’s confirmation the application had been withdrawn. “ICBA and the nation’s community banks urge the credit union regulator to publicly weigh in on whether Rakuten is seeking a credit union charter — information that federal banking regulators make public as a matter of course.”
‘Strong’ Opposition Expressed
The ICBA added in filing its FOIA request that NCUA, “unlike federal banking regulators,” does not “maintain public databases of organizations and entities that have applied for federal insurance or a national charter.”
The bankers group said it has “strongly opposed” Rakuten’s repeated applications for FDIC deposit insurance as an industrial loan company, which would allow the "the Amazon of Japan's" subsidiary to “skirt regulatory oversight and violate U.S. policy separating banking and commerce.”
White Paper Suggests ‘Risks’
ICBA has published what it calls a comprehensive white paper that argues the ILC charter allows applicants’ parent companies to avoid the legal restrictions of the Bank Holding Company Act, while the “commercial activities of ILC applicants like Rakuten pose risks to the FDIC's Deposit Insurance Fund and the financial system more broadly.”
In announcing its FOIA request, the ICBA also repeated its earlier statement that “NCUA has presided over a credit union industry that has strayed from its founding mission of serving people of modest means with a common bond while leveraging taxpayer-funded subsidies to acquire local community banks — with each transaction displacing a trusted source of credit, further consolidating the banking industry, and increasing the portion of the industry exempt from Community Reinvestment Act oversight.”
Call for Hearings, Study
The banking trade group repeated its call for Congress to hold hearings on the CU Tax exemption, that GAO conduct a study of the industry, and that an “exit fee” be charged when credit unions acquire banks to “capture the value of the tax revenue lost once the acquired bank’s business activity becomes tax-exempt.”
Are You Being Gouged for Bank-Like Subscription Fees for Old News? Here’s a CU-Like Way to Fix That
The biggest, best and freshest news reporting in credit unions remains free! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more. So stop paying those bank-fee-like subscription prices from other so-called “news”” publications!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?