Pub. 12 2015 Issue 3

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S Fall • 2015 11 Such a relaxation of standards makes the industry’s insurance fund vulnerable and leaves taxpayers holding the bag should anything go wrong. Indeed, NCUA has failed to prove that it is ready or able to supervise institutions with major business loan portfolios. A quick look at credit unions’ track record on business lend- ing raises serious concerns about whether they, or their regula- tor, are equipped to handle these loans. Since 2010, at least five credit unions have failed because of poorly run business loan programs. These failures accounted for a quarter of all losses to the insurance fund over that period. It’s a situation that does little to instill confidence in broadening credit unions’ commer- cial lending authority. All of this should concern not only bankers but Congress, too. When Congress last weighed in on whether and howmuch cred- it unions should be lending to businesses, it voted for less, not more. In fact, the 1998 law that restricted member business loans to 12.25 percent of assets emphasized that credit unions should focus on consumer lending in order to remain true to their mission. Since then, credit unions have repeatedly im- plored Congress to change the rules, and lawmakers have de- clined to do so. Bankers had a lot-in fact, everything-to do with frustrating credit unions’ ambitions in Congress. Every time they pushed for a member business lending bill, you pushed back harder. You helped make clear to Congress that such a bill would be unacceptable to the nation’s community banks. Now we must do it again. ABA and the state associations mounted a major grassroots letter-writing campaign in August that resulted in an outpouring of banker comment letters to NCUA on the proposal. The letters may not persuade NCUA, but they will slow down the process. That gives us time to bring Congress into the debate. If you are facing unfair and unbridled credit union competi- tion, write to your lawmakers today. (And if you aren’t, write anyway-because it’s just a matter of time before an aggressive credit union enters your market.) Let lawmakers know how the unlevel playing field between community banks and tax-subsi- dized credit unions is harming your ability to serve your cus- tomers. Unfortunately, the NCUA’s business lending proposal is only the beginning. The agency has already announced that it has an expanded field-of-membership rule and a secondary capital proposal in the works as well. This rulemaking trifecta, which could seriously undermine bank competitiveness, puts NCUA in “captive regulator” terri- tory, and it must be answered. The agency must be reminded not only of credit unions’ mission but also its own: to ensure a safe and sound credit union system.  Reach your target audience a ordably. advertise get results DANI GORDEN Advertising Sales 855.747.4003 dani@thenewslinkgroup.com