Alabama bankers not happy with new credit union rule
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Banks and credit unions are once again at odds over a new rule from the NCUA.
k4d
The American Bankers Association[1] filed a lawsuit against the National Credit Union Administration in an effort to overturn a rule that makes it easier to join a credit union - rule scheduled to take effect in February next year.
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Locally, credit unions in the state have seen significant growth in membership and deposits, and the new rule, which allows federal credit unions to apply to serve what are defined as “rural districts” — areas of of up to 1 million people — in addition to areas that are contiguous to their existing service areas, reaches too far, according to the Alabama Bankers Association president Scott Latham[2].
Banks and credit unions are once again at odds over a new rule from the NCUA.
k4d
"The NCUA’s latest rule expanding fields of membership is yet another 'in your face' response to Congress’ instruction that community credit unions serve only a single, well-defined local community," Latham said. "Just as it recently loosened the business lending cap on credit unions, a decision which is being challenged in a separate lawsuit by the Independent Community Bankers of America, the agency’s latest action further paves the way for the mammoth tax-free industry to continue its growth on the backs of American taxpayers."
Latham said bankers throughout the state oppose the new rule and fully support the lawsuit filed this week.
He has argued consistently over the years that credit unions have unjustly been allowed to operate as banks without paying taxes.
"Worse yet, it’s just the latest example of the agency doing too much cheerleading and not enough regulating," he said. "We applaud the efforts of both the American Bankers Association and the Independent Community Bankers of America is seeking to limit these unwarranted moves."
According to the NCUA, federal credit unions are typically organized by individuals who volunteer their time and resources and are responsible for determining the interest, commitment and economic considerations of forming the institution.
As we noted in a recent Cover Story, Birmingham banks and credit unions are consistently finding themselves at odds – as credit unions seek to enter markets or area of lending that have traditionally been the domain of banks. Banks argue credit unions have an unfair advantage because, as nonprofits, they don't pay taxes. Credit unions, on the other hand, say their nonprofit status allows them to offer better interest rates for members.[3]
Michael Seale covers the banking, finance and legal beats for the Birmingham Business Journal
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Please Sign In and use this article's on page print button to print this article.
Banks and credit unions are once again at odds over a new rule from the NCUA.
k4d
The American Bankers Association[4] filed a lawsuit against the National Credit Union Administration in an effort to overturn a rule that makes it easier to join a credit union - rule scheduled to take effect in February next year.
Upcoming Events
Featured Jobs
Locally, credit unions in the state have seen significant growth in membership and deposits, and the new rule, which allows federal credit unions to apply to serve what are defined as “rural districts” — areas of of up to 1 million people — in addition to areas that are contiguous to their existing service areas, reaches too far, according to the Alabama Bankers Association president Scott Latham[5].
Banks and credit unions are once again at odds over a new rule from the NCUA.
k4d
"The NCUA’s latest rule expanding fields of membership is yet another 'in your face' response to Congress’ instruction that community credit unions serve only a single, well-defined local community," Latham said. "Just as it recently loosened the business lending cap on credit unions, a decision which is being challenged in a separate lawsuit by the Independent Community Bankers of America, the agency’s latest action further paves the way for the mammoth tax-free industry to continue its growth on the backs of American taxpayers."
Latham said bankers throughout the state oppose the new rule and fully support the lawsuit filed this week.
He has argued consistently over the years that credit unions have unjustly been allowed to operate as banks without paying taxes.
"Worse yet, it’s just the latest example of the agency doing too much cheerleading and not enough regulating," he said. "We applaud the efforts of both the American Bankers Association and the Independent Community Bankers of America is seeking to limit these unwarranted moves."
According to the NCUA, federal credit unions are typically organized by individuals who volunteer their time and resources and are responsible for determining the interest, commitment and economic considerations of forming the institution.
As we noted in a recent Cover Story, Birmingham banks and credit unions are consistently finding themselves at odds – as credit unions seek to enter markets or area of lending that have traditionally been the domain of banks. Banks argue credit unions have an unfair advantage because, as nonprofits, they don't pay taxes. Credit unions, on the other hand, say their nonprofit status allows them to offer better interest rates for members.[6]
Michael Seale covers the banking, finance and legal beats for the Birmingham Business Journal
Upcoming Events
References
- ^ American Bankers Association (companies.bizjournals.com)
- ^ Scott Latham (feeds.bizjournals.com)
- ^ As we noted in a recent Cover Story (www.bizjournals.com)
- ^ American Bankers Association (companies.bizjournals.com)
- ^ Scott Latham (feeds.bizjournals.com)
- ^ As we noted in a recent Cover Story (www.bizjournals.com)