Banks’ attacks against a supplemental capital bill for credit unions are spurious, will go nowhere, and run counter to a growing interest among members of Congress in capital reform not only for credit unions, but for financial institutions generally, said the Credit Union National Association Monday.
“The Independent Community Bankers of America Association’s criticism of the Capital Access for Small Business Act (H.R. 719) is disingenuous and will be seen as such on the Hill,” said CUNA Executive Vice President of Government Affairs John Magill Monday, after the ICBA circulated a letter to federal lawmakers attacking the legislation.
“The truth is, this bill is very balanced. That is and will continue to be our message on Capitol Hill. It would provide credit unions with the appropriate ability to raise capital from sources other than retained earnings without in any way jeopardizing the ‘one member, one vote’ principle that is the bedrock of the credit union ownership structure.
“Moreover, this bill also would strengthen the safety and soundness of credit unions by allowing them to develop a supplemental cushion as an added safeguard,” Magill noted.
The bill was introduce Feb. 14 by Reps. Pete King (R-N.Y.) and Brad Sherman (D-Calif.) and would allow well-capitalized credit unions to match a growing deposit base from a growing membership with capital from sources other than retained earnings–which currently is the only type of capital that counts at a credit union. The bill is substantially similar to last year’s H.R. 3993, which had 45 cosponsors. “Congress is showing greater interest in capital reform, and we expect our legislation to be part of the discussion,” said Magill.continue reading »