A lack of oversight by the NCUA allowed New York credit unions to lure unsuspecting taxi drivers into taking out loans they could not afford, the trade group representing community bankers charged Thursday, in asking for a congressional probe of the issue.
“This was a replay of the subprime lending crisis in residential mortgages prior to 2008, and a remarkable failure of lenders and regulators to learn the lessons of that recent crisis,” Independent Community Bankers of America President/CEO Rebeca Romero Rainey said, in letters to the congressional committees with oversight of the NCUA.
She said that the problem indicates that the NCUA has been “captured” by the credit unions it supervises.
Rainey’s charges are the latest salvos in the long battle between credit unions and banks, which allege that credit unions have an unfair competitive edge since they are tax exempt institutions.
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