ALEXANDRIA, Va.–In response to a letter written by Frank Keating, president of the American Bankers Association, that appeared in The Hill and that was critical of credit unions and their “runaway regulator,” NAFCU CEO Dan Berger called on the bankers to clean up their own messes first.
“Frank Keating of the American Bankers Association would do well to clean up his own backyard before casting aspersions on credit unions. For banks, 2014 was a year of big penalties,” wrote Berger in a letter to the same publication. “Instead, he seems more interested in maligning credit unions’ not-for-profit, member-focused business model. How unfortunate. This is a time when we in the financial industry should be working together to help achieve relief from an increasingly overwhelming regulatory environment. The Financial Regulatory Improvement Act of 2015 is one example of legislation that has numerous measures that would help provide financial institutions, including credit unions, greater regulatory relief.
“Regarding his concern about the growth of credit union business lending, credit union business lending filled a critical void,” Berger continued. “A 2011 study commissioned by SBA’s Office of Advocacy found that bank business lending was largely unaffected by changes in credit unions’ business lending, and credit unions’ business lending can actually help offset declines in bank business lending during a recession. The study indicates that during the 2007-2010 financial crisis, while banks’ small business lending decreased, credit union business lending increased in terms of the percentage of their assets both before and during the crisis.
“Banks are welcome to convert to credit unions anytime they wish if they truly want the advantages of being a credit union,” concluded Berger. “Until then, let’s put our energies toward achieving meaningful change to our current system that will benefit all of us especially American consumers in the long run.”